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In: Accounting

At 31 December 2018, Prince Ltd reported these non-current assets:        $        $ Building 318,000...

  1. At 31 December 2018, Prince Ltd reported these non-current assets:

       $

       $

Building

318,000

Less: Accumulated depreciation

145,200

172,800

Equipment

720,000

Less: Accumulated depreciation

288,000

432,000

Total non-current assets

604,800

During 2019, the following selected transactions occurred:

May 1      Sold equipment that cost $720,000 for $420,000.

June 30   There was an indication that the building could be impaired due to flooding, Prince Ltd calculated the recoverable amount of the building. The net selling price was $155,000 and the value in use was estimated to be $147,000.

Prince Ltd uses straight-line depreciation for buildings and equipment. The building is estimated to have a 40-year useful life and no residual value. The equipment is estimated to have a 10-year useful life and no residual value.

Required

  1. Journalise the transactions that occurred during 2019 [8 marks]

Explain the difference between impairment and depreciation [3 Marks]

Solutions

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ekkarill92 answered 1 year ago
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