Depreciation from an annual report Following is a note from Westwood Ltd’s recent annual report:

1 Summary of significant accounting policies on noncurrent assets Property and equipment – Property and equipment is recorded at cost and depreciation is calculated on a straight-line basis. Buildings and improvements have an expected useful life of 15–30 years, while the expected useful life of equipment is 4–15 years and furniture and fittings is 5–10 years. For 2022 and 2021, the assets included in property and equipment are as follows:

2022 2021

$000 $000 Land 59 778 57 850 Buildings and improvements 150 172 149 172 Equipment, furniture and fittings 27 850 27 706 Leasehold improvements 14 695 16 699 252 495 251 427 Less: Accumulated depreciation (55 383) (50 000)

197 112 201 427 1 If Westwood Ltd did not sell any property and equipment in 2022, what depreciation expense would have been recorded for 2022?

2 Assume that Westwood Ltd did not record its depreciation expense in 2022. What is the effect of this error on the following?

a profit b current assets c noncurrent assets 3 What was the cost of the land purchased?