Question
A machine costs $240,000 and has a residual value of $20,000. Useful life: 10 years. It is acquired January 1, 2025. On January 1, 2028, the company spends $60,000 on an improvement that significantly increases productive capacity. At that date, management determines that the machine has 6 years remaining and residual value of $12,000.
Required: Calculate depreciation for 2028.
Statements in this challenge
- 2028 DepreciationNumeric Answer
Scoring
- 40% Account naming / line matching
- 40% Amount correctness
- 20% Structure / section placement
How to approach this
IAS 1 — Presentation of Financial Statements
A composite challenge links several statements built from one set of data, so figures flow between them: profit reaches retained earnings, and the closing balances feed the position statement. Complete them in the order the statements depend on each other rather than the order of the tabs.
Common mistakes
- Preparing each statement independently, so the linking figures disagree.
- Carrying a figure forward before finishing the adjustments that change it.
- Reworking a linked figure in one statement without updating it in the others.
Further readingIAS 1: what goes where in a full set of statements