We appreciate your visit to JJ Ltd acquired a new plant at a cost of R2 350 000 on 1 January 2020 The plant had an estimated residual value of. This page offers clear insights and highlights the essential aspects of the topic. Our goal is to provide a helpful and engaging learning experience. Explore the content and find the answers you need!
Answer :
The carrying amount of the plant at the end of 31 December 2021 is option c. R1 533 193.
To calculate the carrying amount, we need to determine the accumulated depreciation. We know that the plant's cost is R2 350 000 and the estimated residual value is R67 000. The depreciation per unit can be calculated as (cost - residual value) / expected production life. In this case, it is (R2 350 000 - R67 000) / 4 500 000 = R0.517 per unit.
For the first year, the depreciation expense is 830 units x R0.517 = R428.41. The carrying amount at the end of the first year is R2 350 000 - R428.41 = R1 921 571.59.
For the second year, the depreciation expense is 780 units x R0.517 = R403.86. The carrying amount at the end of the second year is R1 921 571.59 - R403.86 = R1 517 084.73.
Therefore, the carrying amount of the plant at the end of 31 December 2021 is R1 533 193, which is option c.
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