Advanced accounting

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madinashabana11 (Querist)
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05 August 2011 Sir,i have a doubt in the following problem.i.e, while calculating the current cost of old asset shall we add the cost of old asset or not? mostly we are adding but in this problem i found only increased amount of material & labour has taken & not cost of old asset plz clear me regarding this..i'm a self studying student.
Power electricity co. decids to replace its old plant by an improved plant with larger capacity. the cost of the new plant is rs 16,00,000. Material & LAbour earlier and now are in the ratio of 4:6. Original cost of the old plant is rs 3,00,000.Materials cost has gone up by 2.5 times and labour cost by 3 times since then. old materials worth rs 10,000 were used in the construction of the new plant & rs 20,000 were realised from the sale of old materials.

CA. Vikash Dwivedi

CA. Vikash Dwivedi (Expert)
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05 August 2011 i would suggest to take help of esahaayta from icai. its email id given in icai home page.
thye can ususlly solve these kind of specific probs.
hope this will work.