Question
A machine's original cost records were kept at the asset level only — no individual component cost was ever tracked separately. During the year, a major part of the machine is replaced for $30,000, extending the machine's productive life by several years. Because the original component's cost was never separately identifiable, its remaining carrying amount cannot be directly determined.
Required: determine the amount capitalized for the replacement.
Statements in this challenge
- Amount CapitalizedNumeric 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