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Depreciation and Revaluation of Fixed Assets The following details were taken from the books of Casey Ltd: 01/01/2004 Buildings at cost amounted to €570,000 - Leaving Cert Accounting - Question 2 - 2006
Question 2
Depreciation and Revaluation of Fixed Assets The following details were taken from the books of Casey Ltd: 01/01/2004 Buildings at cost amounted to €570,000. 01/0... show full transcript
Worked Solution & Example Answer:Depreciation and Revaluation of Fixed Assets The following details were taken from the books of Casey Ltd: 01/01/2004 Buildings at cost amounted to €570,000 - Leaving Cert Accounting - Question 2 - 2006
Step 1
The Buildings Account for the two years 2004 and 2005.
Answer
The Buildings Account summarizes the initial cost of buildings and subsequent entries for purchases and disposals. Below is the account structure:
| Date | Details | Amount (€) |
|------------|--------------------|-----------------|
| 01/01/04 | Balance b/d | 570,000 |
| 01/05/04 | Bank | 160,000 |
| 01/05/04 | Disposal | -130,000 |
| 31/12/04 | Balance c/d | 600,000 |
| 01/01/05 | Balance b/d | 600,000 |
| 01/01/05 | Rev. Reserve | 200,000 |
| 31/12/05 | Balance c/d | 800,000 |
| 01/01/06 | Balance b/d | 800,000 |
Step 2
The Provision for Depreciation Account for the two years 2004 and 2005.
Answer
The Provision for Depreciation Account tracks the accumulated depreciation over the years as follows:
| Date | Details | Amount (€) |
|------------|--------------------|-----------------|
| 01/05/04 | Disposal | 20,000 |
| 01/01/04 | Balance b/d | 76,000 |
| 31/12/04 | Profit & Loss | 31,000 |
| | Balance c/d | 107,000 |
| 01/01/05 | Rev. Reserve | 87,000 |
| 31/12/05 | Balance c/d | 103,000 |
| 01/01/06 | Balance b/d | 16,000 |
Step 3
The Buildings Disposal Account for the year ended 31/12/2004.
Answer
The Buildings Disposal Account outlines the sale of buildings:
| Date | Details | Amount (€) |
|------------|--------------------|-----------------|
| 01/05/04 | Buildings | 130,000 |
| 31/12/04 | Profit & Loss | 10,000 |
| | Disposal | 240,000 |
Step 4