I would like to know how to include the 21 VOT in this answer If i should include it before of after the estimated cost of dismantling Thanks QUESTION IAS 16 Fixed Assets We are a graphic arts company, and at the beginning of 2016, we acquired a new printer The price of this printer was 25,000 euros The additional expenses of the purchase were as follows Installation and assembly 3 000 euros Transportation and delivery 1 150 euros All operations have a 21 VAT (not included), and the payment of the amounts is made by bank check During January, the assembly and installation of the new printer takes place, which is in perfect working condition from February the 1st The useful life expectancy of the printer is estimated at 10 years, and its amortisation will be carried out following the linear method Additionally, at the end of its useful life, the company will have to face the costs of dismantling and rehabilitation of the place Estimating said costs in 5,000 euros Besides, said machinery requires specialised weekly maintenance, amounting to 250 euros per month Calculate The initial cost of the acquisition The amortization fees The costs derived from daily maintenance ANSWER IAS 16 INITIAL COST Per IAS 16, the initial cost of the property should be IAS 16 15 Cost includes all costs necessary to bring the asset to working condition for its intended use This would include not only its original purchase price but also costs of site preparation, delivery and handling, installation, related professional fees for architects and engineers, and the estimated cost of dismantling and removing the asset and restoring the site Purchase Price 25,000 euros Plus Installation and assembly 3 000 euros Plus Transportation and delivery 1 150 euros Plus Estimated Dismantling 5,000 euros TOTAL 34,150 AMORTIZATION FEES The depreciable amount (cost less residual value) should be allocated on a systematic basis over the asset's useful life IAS 16 50 Amortization (Cost less Residual Value) Useful Life Amortization 34,150 10 3,415 DAILY MAINTENANCE The total monthly cost should be divided by days per month to compute the daily maintenance cost Daily Maintenance 250 30 8 33

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I would like to know how to include the 21%VOT in this answer. If i should include it before of after the estimated cost of

I would like to know how to include the 21%VOT in this answer. If i should include it before of after the estimated cost of dismantling. Thanks.

QUESTION

IAS 16. Fixed Assets. We are a graphic arts company, and at the beginning of 2016, we acquired a new printer. The price of this printer was 25,000 euros. The additional expenses of the purchase were as follows:

Installation and assembly: 3.000 euros.
Transportation and delivery: 1.150 euros.

All operations have a 21% VAT (not included), and the payment of the amounts is made by bank check.

During January, the assembly and installation of the new printer takes place, which is in perfect working condition from February the 1st.

The useful life expectancy of the printer is estimated at 10 years, and its amortisation will be carried out following the linear method. Additionally, at the end of its useful life, the company will have to face the costs of dismantling and rehabilitation of the place. Estimating said costs in 5,000 euros. Besides, said machinery requires specialised weekly maintenance, amounting to 250 euros per month.

Calculate:

The initial cost of the acquisition.
The amortization fees.
The costs derived from daily maintenance.

ANSWER

IAS 16

INITIAL COST

Per IAS 16, the initial cost of the property should be:

[IAS 16.15] Cost includes all costs necessary to bring the asset to working condition for its intended use. This would include not only its original purchase price but also costs of site preparation, delivery and handling, installation, related professional fees for architects and engineers, and the estimated cost of dismantling and removing the asset and restoring the site:

Purchase Price 25,000 euros

Plus: Installation and assembly 3.000 euros.

Plus:Transportation and delivery 1.150 euros.

Plus: Estimated Dismantling 5,000 euros.

TOTAL: 34,150

AMORTIZATION FEES

The depreciable amount (cost less residual value) should be allocated on a systematic basis over the asset's useful life [IAS 16.50].

Amortization= (Cost less Residual Value) / Useful Life

Amortization = 34,150 / 10 = 3,415

DAILY MAINTENANCE

The total monthly cost should be divided by days per month to compute the daily maintenance cost.

Daily Maintenance = 250 / 30 = 8.33