Question 2

Yanbu Manufacturing Company has the following activities during 2022.

Beginning of the year

Purchased Land & Building SR50,000,000.

Costs attributed to:

Building 80% Land20%

Building has a useful life of 20 years

Residual valueZero

Depreciated using straight line

Consumer Price Index

Beginning of the year 125

Ending of the Year 175

Average 140

Special Price Index for the year

Land increases by 50%

Construction Cost increased by 30%

Fixed Assets increased by 25%

A. Considering the Historical Cost Constant Dollar (GPL) method, what would be the value of this building, and its accumulated depreciation on the company balance sheet?

	Historical Cost (SAR)	Price Level Adjustment	Historical Cost Constant Value (SAR)

B. Considering the current rate (SPL) method, what would be the value of this building, and its accumulated depreciation on the company balance sheet?

	Historical Cost (SAR)	Price Level Adjustment	Current Cost (SAR)