Question

THE FOLLOWING INFORMATION RELATES TO Q 13 to Q15 Waterford Company has a Robot which cost $60,000 on I January 2018. The Robot has a 10 On I January 2021, the Fair Value of the Robot is $31,000 with costs to sell of $1,000. The year useful life with a Residual Value of $10,000. The remaining useful life of the Robot on 1 January 2021 is 4 years. The company uses straight Value in Use of the Robot is $25,000. The remaining useful tife of the Robot on 1 Jantiary 2021 is 4 years. Thal value of zero. Based on the information provided, what is the Carrying Amount of the Robot on 1 January 2021?

Answer 1

The carrying amount of the robot on January 1, 2021 is $15,000.

Step-by-step explanation:

The carrying amount of an asset is calculated by subtracting the accumulated depreciation from the cost of the asset.

In this case, the cost of the robot is $60,000 and it has a remaining useful life of 4 years on January 1, 2021.

The straight-line depreciation expense per year would be ($60,000 - $10,000) / 10 = $5,000.

So, the accumulated depreciation on January 1, 2021 would be $5,000 x (2021 - 2018) = $15,000.

The fair value of the robot on January 1, 2021 is $31,000 with costs to sell of $1,000. Therefore, the carrying amount of the robot on January 1, 2021 would be $31,000 - $1,000 - $15,000 = $15,000.