FA NCA

The non-current asset register shows a carrying amount for non-current assets of $85,600;

the ledger accounts include a cost balance of $185,000 and an accumulated depreciation

balance of $55,000.

Which of the following statements may explain the discrepancy?

• The omission Of an addition Of land costing $30,000 from the ledger account and the

  omission Of the disposal Of an asset from the register (cost $25,600 and accumulated

  depreciation at disposal $11,200).

• The omission of the revaluation of an asset upwards by $16,600 and the depreciation

  charge of $20,000 from the ledger account and the omission of the disposal of an asset

  with a carrying amount of $41,000 from the register.

• The omission of the disposal of an asset from the ledger accounts (cost $25,600 and

  accumulated depreciation at disposal $11,200) and the omission of an addition of land

  costing $30,000 from the register.

• The omission of an upwards revaluation by $16,400 from the register and the

  accidental debiting of the depreciation charge of $28,000 to the accumulated

  depreciation ledger account.

Which of the following statements is true in relation to the non-current asset register?

• It is an alternative name for the non•current asset ledger account.

• It is a list of the physical non-current assets rather than their financial cost.

• It is a schedule of planned maintenance of non-current assets for use by the plant engineer.

• It is a schedule of the cost and other information about each individual non•current

  asset.

A non-current asset was purchased at the beginning Of Year 1 for $2,400 and depreciated at

20% per annum using the reducing balance method. At the beginning of Year 4 it was sold

for $1,200.

What was the profit or loss on disposal?

• $240.00 loss

• $28.80 loss

• $28.80 profit

• $240.00 profit

A business' non-current assets had a carrying amount of $125,000. An asset which had cost

$12,000 was sold for $9,000, at a profit of $2,000.

What is the revised carrying amount of non-current assets?

• $113,000

• $118,000

• $125,000

• $127,000

A non-current asset was disposed of for $2,200 during the last accounting year. It had been

purchased exactly three years earlier for $5,500, with a residual value of $500, and had been

depreciated on the reducing balance basis, at 20% per annum.

What was the profit or loss on disposal?

• $360 loss

• $150 loss

• $104 loss

• $200 profit

At the end of its financial year, Tanner Co had the following non-current assets:

Land and buildings at cost $10.4 million

Land and buildings: accumulated depreciation $0.12 million

Tanner Co decided to revalue its land and buildings at the year-end to $15 million.

What will be the value of the revaluation surplus if the revaluation is accounted for?

• $5.72 million

• $3.72 million

• $4.62 million

• $4.72 million

Which of the following items should be accounted for as asset expenditure?

• The cost of painting a building

• The replacement of broken windows in a building

• The purchase of a car by a car dealer for re-sale

• Legal fees incurred on the purchase Of a building

F Co purchased a car for $12,000 on 1 April 20X1 which has been depreciated at 20% each

year straight line, assuming no residual value. F CO's policy is to charge a full year's

depreciation in the year of purchase and no depreciation in the year of sale. The car was

traded in for a replacement vehicle on 1 August 20X4 for an agreed figure of $5,000.

What was the profit or loss on the disposal Of the vehicle for the year ended 31 December

20X4?

• Loss $2,200

• Loss $1,400

• Loss $200

• Profit $200

Which Of the following statements best describes depreciation?

• It is a means of spreading the payment for non-current assets over a period of years.

• It is a decline in the market value of the assets.

• It is a means Of spreading the cost Of non-current assets over their estimated useful

  life.

• It is a means of estimating the amount of money needed to replace the assets.

The reducing balance method Of depreciating nor-I-current assets is more appropriate than

the straight-line method in which Of the following situations?

• There is no residual value for the asset

• The useful life of the asset is not capable of being estimated

• The asset is expected to be replaced in a short period of time

• The asset decreases in value less in later years than in the early years of use