Question

Question Two Shelly Pharma Limited (SPL) is a manufacturer of pharmaceutical products. In January 2015, one of its plants suffered a major break down. It was repaired at a cost of Tshs. 1.5 million but the production capacity was reduced significantly. The plant was ready for production on June 30, 2015. At that time the company's engineers advised that the plant could be used at a reduced level for 3 years only. The factory was estimated to have a recoverable amount of Tshs. 19,277,000 at June 30, 2015. Other related information is as under:

Answer 1

Tshs (inmillion Amount at which plant will be capitalised at 312.2005 Cost of purchase (2000x20800) 41-6 H) Installation cost Tshs 48-6 million Revaluation susplus Tshs Cinmillan Plant devaluation on July 2010 45 - Cassing value on July 2010 $34.62 08.-148.6 - 2 15 -243050, 33x 4.5 Ishs. 13.93 millions New depreciation 45-2 - $4.095 million year 10.5 3) Impaisement Carrying value on June 2015 - 45 - 14.09585) $94.52 mi Recoverable amount - 19.277 mellion Impairment. Ishs 5.243 million