At 1 September 2018, the property, plant and equipment of Tusculum Limited had a carrying value of £379,149. During the year ended 31 August 2019, additions with a cost of £167,382 were made. The company sold various items of property, plant and equipment during the year. These items of property, plant and equipment sold had a carrying amount of £25,491 at the date of disposal. At 31 August 2019, the property, plant and equipment had a carrying amount of £422,185.
Based on these figures, how much depreciation was charged on property, plant and equipment in the financial year ended 31 August 2019?

Question

Quizplus · Accepted Answer

To calculate the depreciation charged, start with the initial carrying value, add the cost of additions, subtract the carrying amount of disposals, and compare the result to the final carrying value. Initial value (£379,149) + Additions (£167,382) - Disposals (£25,491) gives a pre-depreciation value of £521,040. The final carrying value is £422,185. The difference (£521,040 - £422,185) is £98,855, which is the depreciation charged.

At 1 September 2018, the Property, Plant and Equipment of Tusculum