Q.1. ABC Ltd. a graphic design service, purchased a laptop for Rs. 50000 on April1, 2021.

The laptop
had a four-year life, a Rs. 1000 residual value, and was depreciated using the SLM. At September 30,
2023, a test for impairment indicates that the present value of future cash flows from the laptop is
Rs. 15000. The fair value less costs to sell of the laptop on that date is Rs. 12000. Calculate loss on
impairment on Sept. 30, 2023.

Q.2. XYZ Company bought a plant on January 1, 2010 for Rs. 15000 with an estimated useful life of
five years and depreciated it using SLM. On Dec 31, 2012, what is the carrying amount of the plant?
Assume further that the current purchase price of a new plant is Rs. 25000. If the existing plant is
revalued, calculate carrying amount.

Q.3. There are three separate real estate companies: US Reality (which applies the cost model). UK
Reality (revaluation model) and International reality (Fair value model). On Dec 31, 2003, each pays
USD 1000 cash to obtain investment property comprising land and office building worth USD 1000.
The building has a 10 year useful life, has no residual value and is expected to provide a constant
stream of economic benefits over time.

What is the accounting entry for each company for the following four scenarios?

a) On Dec 31, 2003, at acquisition

b) On Dec 31, 2004, assuming the investment property fair value is USD 1300.
c) On Dec 31, 2003, assuming the investment property fair value is USD 1100.
d) On Dec 31, 2003, assuming the investment property fair value is USD 500.