Q1:

Initial Measurement at Recognition – Cost

Land 1,200,000
Mat 2,400,000
Labour 3,000,000
Arch fee 25,000
Surveyor fee 15,000
Site overhead 300,000
Testing of fire alarms 10,000
Total $6,950,000

Corrected option B --- $6,950,000

Q2:

Both statement 1 & 3 are correct

Q3:

1) True

2) True

3) True

4) True

5) False

Q: 4

Given Data

Jan 20X7:

Cost = 500,000

Useful life = 10 years

RV = $20,000
Jan 20X8:

Safety guard = 25,000

Useful life= 5 yrs

RV= 0

For 20X7: ( July – Jan )

= Cost – residual value / useful life * 6 / 12

= 500,000 – 20,000 / 10 * 6 / 12

= 48000/10 * 0.5

= $2400

For 20X8 ( Jan – March )

Cost of guard safety = 25,000

= Cost of guard safety / useful life

= 25,000 /5

= 5000 * 3 / 12

= 5000 * 0.25

= $1250

Total depreciation for the year ended 31 March 20X8

= 2400 + 1250

= $3650

Q5:

As there is no change in the useful life so depreciation will be charged on revalued

amount:

Depreciation charge for the year 20x9

= 64,000 / 15

= $4,267
Q6:

No depreciation will be charged for the investment property at the fair value because

the building is given to a third party – IAS 40

Revaluation surplus for the year 20X8

Fair value = $ 1.2 million

Carrying amount= $900,000

Revaluation surplus= CA – FV

= 1,200,000 – 900,000

= $ 300,000

Q: 7 Investment properties are not depreciated

Option d

( Investment property likely to increase its value so any residual value would be greater

than its carrying amount.)

Q: 51

Impaired asset is measured at ( Recoverable Amount )

Q: 52

Reversal of impairment losses :

Option 1 & 3