Kateri Ltd sold an item of plant to its subsidiary, Patrick Ltd, on 1 January 2023 for $50. The asset had cost A Ltd $60 and had a useful life of 6 years when acquired on 1 January 2021 from an external party. The adjustment necessary on consolidation to reflect the tax effect of the depreciation adjustment for the year ended 30 June 2023 will result in an increase in: Group of answer choicesincome tax expense.deferred tax liabilities.deferred tax assets.current tax liability.

Purple Ltd sold an item of plant to its subsidiary, Rain Ltd, on 1 January 2023 for $50 000. The asset had cost Purple Ltd $60 000 and had an useful life of 6 years when acquired on 1 January 2021 from an external party. The adjustment necessary on consolidation in relation to the transfer of plant as at 30 June 2023 will result in: Group of answer choicesa decrease in current year profit.an increase in current year profit and non-current assets.an increase in current year profit.a decrease in current year profit and non-current assets.

Lane Ltd became a wholly owned subsidiary of Grant Ltd on 1 October 20X5.  The Grant Ltd Group has the year-end of 30 September.  On 1 April 20X6, Lane Ltd sold a plant to Grant Ltd for $430,000. At the date of sale, the plant had an original cost to Lane Ltd of $480,000 and accumulated depreciation of $90,000.  What entry would be posted as part of consolidation adjustments for the year ended 30 September 20X7 to eliminate the unrealised profit on the sale of the plant (ignore depreciation adjustments)? The applicable tax rate is 30%. a. Dr Gain on sale   $50,000Dr Plant                $50,000     Cr Accumulated depreciation       $100,000Dr Deferred tax asset           $15,000     Cr Income tax expense                  $15,000 b. Dr Opening Retained Earnings $40,000Dr Plant                                         $50,000     Cr Accumulated depreciation             $90,000Dr Deferred tax asset    $12,000     Cr Income tax expense               $12,000 c. Dr Accumulated depreciation $90,000     Cr Plant                                                 $50,000     Cr Opening Retained Earnings         $40,000Dr Income tax expense             $12,000     Cr Deferred tax liability                      $12,000 d. Dr Opening Retained Earnings  $40,000Dr Plant                                          $50,000     Cr Accumulated depreciation                $90,000Dr Deferred tax asset    $12,000    Cr Opening Retained Earnings         $12,000

A plant asset was purchased on January 1 for $100,000 with an estimated salvage value of $20,000 at the end of its useful life. The current year's Depreciation Expense is $10,000 calculated on the straight-line basis and the balance of the Accumulated Depreciation account at the end of the year is $50,000. The remaining useful life of the plant asset isGroup of answer choices5 years.10 years.8 years.3 years.

At the beginning of the financial year on 1 April 2020, a company had a balance on plant account of Sh 372,000 and on provision for depreciation of plant account of Sh 205,400. The company’s policy is to provide depreciation using the reducing balance method applied to the non-current assets held at the end of the financial year at the rate of 20% per annum. On 1 September 2020 the company sold for Sh 13,700 some plant which it had acquired on 31 October 2016 at a cost of Sh 36,000. Additionally, installation costs totalled Sh 4,000. During 2018 major repairs costing Sh 6,300 had been carried out on this plant and, in order to increase the capacity of the plant, a new motor had been fitted in December 2018 at a cost of Sh 4,400. A further overhaul costing Sh 2,700 had been carried out during 2019. The company acquired new replacement plant on 30 November 2020 at a cost of Sh 96,000, inclusive of installation charges of Sh 7,000. Calculate: (a) the balance of plant at cost at 31 March 2021 was Sh (b) the total (accumulated) provision for depreciation of plant at 31 March 2021 was Sh . This comprised: - Depreciation for year to 31 March 2017 of Sh - Depreciation for year to 31 March 2018 of Sh - Depreciation for year to 31 March 2019 of Sh - Depreciation for year to 31 March 2020 of Sh (c) the (profit/loss) on disposal of the plant was Sh . This is because the book value of the plant at the date of sale was Sh .

A plant asset was purchased on January 1 for P40,000 with an estimated salvage value of P8,000 at the end of its useful life. The current year's Depreciation Expense is P4,000 calculated on the straight-line basis and the balance of the Accumulated Depreciation account at the end of the year is P20,000. The remaining useful life of the plant asset is.