1. Depreciation of hotel buildings ASH Muscat is perfect for both business and leisure pursuits. For a weekend in Muscat or staying longer, it is one of the largest and most opulent luxury hotels Muscat has to offer, with 280 stylishly appointed hotel rooms & suites, with a remarkable Arabian style interior design. As of 1" January 2019, the company has been accumulated a depreciation of OMR 12 500 for all buildings and the following details are available for your reference. | Cost Building Location Salvage Deprecation Economic in value rate lifetime Activity level: Depreciation method OMR number of days occupied 300 days West-wing 20000 2000 10% or 20% or 25% 10 or 3 or 4 years Straight Leee Method Activity Method East-wing 35000 5000 25% 15 or 7.5 or 5 years 100 or 200 or 300 days North-wing 45000 5000 12% or 5% or 7 or 12 or 8 10% years 300 days South-wing 25000 2000 12% or 5% or 7 or 6 or 5 10% 300 days Written down value method Sum of the Years Digit Method years*** * Estimated total number of days for the entire economic lifetime is 1500 days. ** Previously accumulated depreciation of North-wing is OMR 12000 as at 1" January 2019. ***Remaining lifetime of South-wing is 4 years. NB: "Selection is from your own choice for Deprecation rate, Economic lifetime and Activity level wherever applicable. Question 1 a) Explain the factors of depreciation for hotel buildings and justify each of these factors with case referred examples. b) Calculate the annual depreciation for each of the building separately and justify the reasons for the given depreciation method. c) Prepare provision for depreciation account for the year ended 31" December 2019. 1. Depreciation of hotel buildings ASH Muscat is perfect for both business and leisure pursuits. For a weekend in Muscat or staying longer, it is one of the largest and most opulent luxury hotels Muscat has to offer, with 280 stylishly appointed hotel rooms & suites, with a remarkable Arabian style interior design. As of 1" January 2019, the company has been accumulated a depreciation of OMR 12 500 for all buildings and the following details are available for your reference. | Cost Building Location Salvage Deprecation Economic in value rate lifetime Activity level: Depreciation method OMR number of days occupied 300 days West-wing 20000 2000 10% or 20% or 25% 10 or 3 or 4 years Straight Leee Method Activity Method East-wing 35000 5000 25% 15 or 7.5 or 5 years 100 or 200 or 300 days North-wing 45000 5000 12% or 5% or 7 or 12 or 8 10% years 300 days South-wing 25000 2000 12% or 5% or 7 or 6 or 5 10% 300 days Written down value method Sum of the Years Digit Method years*** * Estimated total number of days for the entire economic lifetime is 1500 days. ** Previously accumulated depreciation of North-wing is OMR 12000 as at 1" January 2019. ***Remaining lifetime of South-wing is 4 years. NB: "Selection is from your own choice for Deprecation rate, Economic lifetime and Activity level wherever applicable. Question 1 a) Explain the factors of depreciation for hotel buildings and justify each of these factors with case referred examples. b) Calculate the annual depreciation for each of the building separately and justify the reasons for the given depreciation method. c) Prepare provision for depreciation account for the year ended 31" December 2019
