The carrying amounts of the assets of TATA Company Limited for the year ended 31st December...
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The carrying amounts of the assets of TATA Company Limited for the year ended 31st December 2009 are as follows: Land and building Intangible Receivables Tshs. 750,000 900,000 150,000 1.800.000 On 1st January 2010 the TATA Co. acquired new land and buildings for Tshs. 150, 000. The remainder of land and buildings, acquired in previous years, has NOT been depreciated until this year. The company has decided to depreciate the buildings, on straight-line method, assuming that one-third of the cost relates to land and that the buildings have an estimated economic life of 30 years. Estimated residual value is ze On 31 December 2015, TATA Co. revalued the non- land element of the Land and buildings to Tshs.550, 000. Again, on 1st January 2020, the company revalued the non-land element to Tshs.399, 000. In January 2021 a rainstorm occurred and the market value of the Property (excluding land) was ascertained as Tshs.350, 000 and cost of disposal Tshs. 12, 500. And the discounted net present value of expected cash flows for the remaining years were Tshs.337, 250. NB: 1. The company policy is to charge a full year of depreciation in the year of purchase and none in the year of sale. 2. The original life of the buildings has not changed as a result of the revaluation 3. Land is not being depreciated Required: a) Calculate the revaluation Surplus/Loss amounts and show the Journal to record the revaluations (15 Marks) b) Is the Property (excluding land) impaired under IAS 36? Show any required journal entries. (05 Marks) The carrying amounts of the assets of TATA Company Limited for the year ended 31st December 2009 are as follows: Land and building Intangible Receivables Tshs. 750,000 900,000 150,000 1.800.000 On 1st January 2010 the TATA Co. acquired new land and buildings for Tshs. 150, 000. The remainder of land and buildings, acquired in previous years, has NOT been depreciated until this year. The company has decided to depreciate the buildings, on straight-line method, assuming that one-third of the cost relates to land and that the buildings have an estimated economic life of 30 years. Estimated residual value is ze On 31 December 2015, TATA Co. revalued the non- land element of the Land and buildings to Tshs.550, 000. Again, on 1st January 2020, the company revalued the non-land element to Tshs.399, 000. In January 2021 a rainstorm occurred and the market value of the Property (excluding land) was ascertained as Tshs.350, 000 and cost of disposal Tshs. 12, 500. And the discounted net present value of expected cash flows for the remaining years were Tshs.337, 250. NB: 1. The company policy is to charge a full year of depreciation in the year of purchase and none in the year of sale. 2. The original life of the buildings has not changed as a result of the revaluation 3. Land is not being depreciated Required: a) Calculate the revaluation Surplus/Loss amounts and show the Journal to record the revaluations (15 Marks) b) Is the Property (excluding land) impaired under IAS 36? Show any required journal entries. (05 Marks)
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Financial Accounting
ISBN: 978-1259103285
5th Canadian edition
Authors: Robert Libby, Patricia Libby, Daniel Short, George Kanaan, M
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