Delta - Marks 10

Past Exam Spring 2016 (FA169) IAS 16 Property, plant & equipment
Answer:
For the year ended 31 December 2013 2014 2015
Statement of profit or loss (Extracts) --- Rupees ---
Depreciation (1,500,633) (2,401,013) (1,169,027)
Maintenance cost [Rs. 528,000 / 3 years] (176,000) (176,000) (176,000)
Admin. Exp (Staff training) (351,000) - -

As at 31 December 2013 2014 2015

Statement of financial position (Extracts) --- Rupees ---
Property, plant and equipment
Cost 9,178,800 9,178,800 10,931,800
Less: Accumulated depreciation (1,500,633) (3,901,647) (5,070,674)
7,678,167 5,277,153 5,861,127

Long term prepayment 176,000 - -

Short term Prepayment 176,000 176,000 -

* Cost in 2015 [Rs. 9,178,800 + 1,753,000 upgrade]

Working: Rupees
List price 9,200,000
Less: Trade discount [Rs. 9,200,000 x 5%) (460,000)
8,740,000
Less: Settlement discount [Rs. 8,740,000 x 3%] (262,200)

Add: Freight charges 263,000

Add: Electrical installation cost 245,000
Add: Pre-production testing 193,000
Cost of machine on 1 January 2013 9,178,800
Depreciation 2013 [(Rs. 9,178,800 - 175,000) x (2000 / 12,000 hours)] (1,500,633)
Depreciation 2014 [(Rs. 9,178,800 - 175,000) x (3200 / 12,000 hours)] (2,401,013)
Carrying value on 1 January 2015 5,277,153
Capitalisation of upgrade 1,753,000
7,030,153
Depreciation 2015 [(Rs. 7,030,153 - 350,000) x (1400 / 8,000 hours)] (1,169,027)
5,861,127