Otter Ltd Has an Item of Plant with a Cost

question 22

Multiple Choice

Otter Ltd has an item of plant with a cost of $4,200,000, and at 30 June 20X4 the accumulated depreciation was $600,000 and its estimated residual amount $200,000; its accumulated impairment was $150,000 at the beginning of the reporting period.
-Otter Ltd has adopted the cost model for the class of assets.At reporting date, the directors determined that the asset's value in use was $3 200,000, its fair value was $3,300,000 and the estimated costs to sell it $150,000.At what amount will it be reported in the balance sheet?

• A)$3,350,000
• B)$3,150,000
• C)$3,500,000
• D)$3,200,000

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Definitions:

Acquired Material

Items or substances that are obtained or collected for use, often referring to resources gathered for a specific project or purpose.

Liabilities

Anything to which a person is liable, responsible, legally bound; debts or accounts payable (A/P) owed by the business.

Accounts Payable

The amount of money owed by a company to its creditors or suppliers for goods and services received but not yet paid for.

Invoice Description

A detailed statement showing goods sold or services provided, their prices, and the total amount to be paid.