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Lecture 1-1

This document discusses accounting for property, plant and equipment under IAS 16. It covers classwork examples calculating depreciation using the straight line method and homework questions for students to practice. The document provides guidance on preparing asset and accumulated depreciation accounts over multiple periods.

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Nouman Shamas
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31 views2 pages

Lecture 1-1

This document discusses accounting for property, plant and equipment under IAS 16. It covers classwork examples calculating depreciation using the straight line method and homework questions for students to practice. The document provides guidance on preparing asset and accumulated depreciation accounts over multiple periods.

Uploaded by

Nouman Shamas
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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CAF-01: FAR-1 Property, plant and equipment (IAS-16)

Lecture 1 (IAS-16) Lecture 1 (overall)

Classwork:
1. Discussed fixed assets and depreciation along with some other relevant concept;
2. Started discussion on straight line method of depreciation and solved question 1; 2 and 13 from
chapter 7 of Crescent book:
Question-1
Mr. Atif has purchased a vehicle. Its cost on January 1, 2008 was Rs. 50,000. Its life is 4 years.
Calculate depreciation for 4 years using straight line method. Year end is December 31.
Question-2
Mr. Latif has purchased a plant. Its cost on 1.4.2008 was Rs. 50,000. Its life is 4 years. Calculate
depreciation expense for year ended December 31, 2008, 2009 and 2010.
Question-13
Mr. Babar purchased the following assets:
Date of purchase Cost
1st April 2009 200,000
1st June 2009 300,000
1st September 2010 500,000
Depreciation rate is 10% under straight line method.
Requirement: Prepare asset a/c and Acc. Dep a/c as on 31st December 2009 and 2010.

Homework:
Question-4
Mr. Atif has purchased an asset on 1.4.2004 for Rs. 50,000. Its residual value is 10,000 and rate of
depreciation is 25% straight line. Year end is 31 December.
Required:
Calculate depreciation from 2004-2007.
Question-5
Mr. Zeeshan has purchased an asset on 1.7.2004 for Rs. 70,000. Its residual value is Rs. 20,000 and useful
life is 4 years. Method used is straight line.
Required:
Calculate depreciation from 2004-2006 assuming year end is December 31.
Question-14
Mr. Anjum has started the business on January 1, 2009 of trading in shoes. He has disclosed the following data
for first three years of his business operations which relates to additions in fixed assets:
Date of Purchase Cost (Rs.)
Year end December 31, 2009
- Asset-1 1.1.2009 30,000
- Asset-2 1.7.2009 10,000

Year end December 31, 2010


- Asset-3 1.4.2010 50,000

Year end December 31, 2011


- Asset-4 1.7.2011 60,000
Useful life of all assets is 4 years.
Required:
Prepare an asset a/c, accumulated depreciation a/c and balance sheet extracts using above mentioned
information for first three years of operations.

Umair Sheraz Utra, ACA. Page |1


CAF-01: FAR-1 Property, plant and equipment (IAS-16)

Umair Sheraz Utra, ACA. Page |2

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