C++ programming

BANGOR UNIVERSITY

AND

MANAGEMENT DEVELOPMENT INSTITUTE OF SINGAPORE

Course :

Module Code and Title : ASB2504 Financial Accounting

Module Tutor : Mr Ajay Kumar

Assessment : Individual Assignment

Date / Due Date :

Duration / Word Length : 1200 words

Weighting within Module : 25% (100 marks)

Assignment Title

The assignment title to be used when submitting this assignment is Property, Plant and

Equipment (PPE)

Assignment Weighing

This assignment is in 3 parts. Each part should be attempted. The weighting to be applied to

each part is:

Part A 10%

Part B 30%

Part C 60%

The assignment forms 25% of the marks of the module.

Assignment Questions

PART A

Answer the five Multiple Choice questions that follow. There is ONE correct answer to each

question, worth 2 marks.

Question 1

Lion Airline has purchased a budget airline and is discussing the way in which it should

depreciate the aircraft as aircraft have a lifespan of 10 years, engines have a lifespan of seven

years and tyres have a lifespan of 18 months. The aircraft should be depreciated on a straight-

line basis over –

A. Seven years useful life of the engine, 1.5 years useful life of the tyres, and 10 years useful

life applied to the balance

B. Seven years useful life

C. 1.5 years useful life

D. 10 years composite useful life

Question 2

An entity owns a fleet of company cars and executive vehicles, and has other property and

equipment in order to service the fleet. It decided to revalue some of its property, plant and

equipment. Which one of the following options complies with IAS 16?

A.Revalue only the cars and not the executive vehicles

B.Revalue only those parts of the fleet that have increased in value

C.Revalue only one-half of each class of property, plant and equipment

D.Revalue an entire class of property, plant and equipment

Question 3

An entity manufactures components for the car industry and uses self-made tools, which it

continually develops. Costs of tooling are depreciated over four years and the tools are

manufactured in its one factory, where 4% of the space is allocated to development. The factory

depreciation charge should –

A.Be allocated on the basis of 4% per annum and added to the cost of the tooling

B.Be allocated on the basis of 1% per year for four years to the cost of the tooling

C.Not be allocated to the cost of the tooling

D.Be allocated on the basis of the value of the tools compared with the factory output to the

cost of the tooling

Question 4

An entity operates a chain of hotels and is proposing to stop depreciating the hotel equipment

and expense the cost of replacement each year. The entity should –

A. Not capitalise groups of assets and expense them

B. Not capitalise groups of assets and expense the replacement cost

C. Capitalise groups of assets but not depreciate them

D. Capitalise all assets with a useful life of more than one year and depreciate them

Question 5

IAS 16 requires a revaluation surplus resulting from initial revaluation of PPE to be treated in

one of the following ways:

A. Credited to long-term provisions and added to the PPE

B. Debited to the class of PPE that is being revalued and credited to a equity

C. Released to the income statement over the life of the PPE

D. Credited to retained earnings as an unrealised gain

PART B

Using the style of question form Part A, i.e. multiple choice questions with five alternative

questions of which one is correct, write THREE multiple choice questions testing knowledge

of:

A. Recognition of PPE

B. Measurement after recognition

C. Depreciation

The work you submit for Part B should clearly identify the correct answer and give the

appropriate feedback for each answer. You may set a question requiring calculations.

PART C

Write a 1000 word (+ 10%) essay in accordance with the requirement:

“The principal issues in IAS 16 are the recognition of the assets, determination of their

carrying amounts and the depreciation charges and impairment losses to be recognized in

relation to them”. Discuss how these issues are dealt in this standard.

END OF ASSIGNMENT