ACCA FR · Chapter 14 · Question 3 of 15
Eland Co's property, plant and equipment had a carrying amount of $1200k at the start of the year and $1450k at the end. During the year depreciation was $180k, assets with a carrying amount of $70k were sold, and land was revalued upwards by $100k. All additions were paid in cash. What cash was paid to buy property, plant and equipment?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) $400k
Explanation
Reconstruct the PPE account: opening 1200 + revaluation 100 + additions X - depreciation 180 - disposals 70 = closing 1450. So X = 1450 - 1200 - 100 + 180 + 70 = $400k. The revaluation is a non-cash increase, so it is deducted in finding cash purchases.
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