03-30-2009, 06:19 PM
Dear All.
Assalam O Alaikum.
I need help on the following question, which i didn't find the solution strictly in accordance in IAS 16.
Javed & Sons (Pvt) Limited, traded off its used plant and machinery for a new model. The old machinery, given off, had a book value of Rs.16,000 and fair value of Rs.12,000. The machine was bought two years back at a cost of Rs.24,000. However, the management traded it off for a new model having invoice price of Rs.32,000. In negotiations with the seller, a tradein- allowance of Rs.18,000 was agreed for the old machine.
Required In the light of IAS-16
(i) Calculate the cost of new machine.
(ii) Compute gain/ loss incurred in exchange transaction.
(iii) Record the transaction in the books of the company.
Assalam O Alaikum.
I need help on the following question, which i didn't find the solution strictly in accordance in IAS 16.
Javed & Sons (Pvt) Limited, traded off its used plant and machinery for a new model. The old machinery, given off, had a book value of Rs.16,000 and fair value of Rs.12,000. The machine was bought two years back at a cost of Rs.24,000. However, the management traded it off for a new model having invoice price of Rs.32,000. In negotiations with the seller, a tradein- allowance of Rs.18,000 was agreed for the old machine.
Required In the light of IAS-16
(i) Calculate the cost of new machine.
(ii) Compute gain/ loss incurred in exchange transaction.
(iii) Record the transaction in the books of the company.
