Determine the depreciation charges for the year ended

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Q1) On 1 January 20X8, EP bought a plant for $100,000. It has a contracted life span of 9 years. However, the plant was not ready for use until 1 January 20X9. Determine the depreciation charges for the year ended 31 December 20X9.

Q2) ET is reviewing the accounting treatment of its buildings. The company uses the 'revaluation model' for its buildings. The buildings had originally cost $10 million on 1 June 2011 and had a useful economic life of 20 years. They are being depreciated on a straight-line basis to a nil residual value.

The buildings were revalued downwards on 31 May 2012 to $8 million which was the buildings' recoverable amount. On 31 May 2013, the value of the buildings had risen to $11 million which is to be included in the financial statements. The company is unsure how to treat the above events. Discuss the accounting treatment for the above transactions.

Reference no: EM133165286

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