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June 19, 2017 at 11:30 am
Sir Q3 Answer is 84.8(Profit).but sir answer
why 1067.84(profit)explain me sir.
John Moffat says
June 19, 2017 at 12:46 pm
The correct answer is $1067.84 profit. You should get a pop-up window showing the workings for the answer when you submit your answer.
May 31, 2017 at 9:53 pm
Good Day Mr. John,
I am really not getting question 2, I don’t understand! why are we using the total cost of all the machines and the depreciation for same as oppose to the actual cost of the machine that we are selling and the depreciation for same? Also, I don’t think I understand how the months and years are counted.
Can you assist me please?
June 1, 2017 at 5:54 am
Have you seen the pop-up answer that shows the workings (if not, then you have a pop-up blocker and need to switch it off).
The year is 1 November 2013 to 31 October 2014.
From 1 November 2013 to 31 December 2013 is 2 months, and for these two months the machines were 120,000 and so 120,000 needs depreciating for 2 months.
Then on 1 January 2014 they sold machines that had cost 30,000, so the machines left cost 90,000 and they need depreciating for the remaining 10 months.
The question wants the total depreciation expense for the year and all the machines they own need depreciating. It is straight line depreciation and so it is calculated on the cost – the accumulated depreciation is irrelevant to the calculation.
Have you watched the free lectures on depreciation?
January 22, 2017 at 8:02 am
Regarding Q2, if the question request for Dep for the year 2014, therefore it should be $15,000. Why must be the 2013 (remaining amount depreciation) to be included in ? Need your assistance as to ensure my understanding on the recognition of depreciation amount is correct.
January 22, 2017 at 8:59 am
Its ok John. I manage to get the explanation for this. Found it on my own. Important here is the year end which i missed out to see.
January 22, 2017 at 4:00 pm
Correct (and the year end is a common ‘trick’ in the exam) 🙂
December 20, 2016 at 11:21 am
sir why have we charge depreciation for 2012 in question 3? it is said in the question that no depreciation must be charged in the year of sale. im stucked
December 20, 2016 at 3:00 pm
The year end is 31 January each year. Since the sale was on 31 March 2012, it was sold in the year ended 31 January 2013 and no depreciation has been charged for that year.
January 28, 2017 at 11:34 am
The question says it was sold on 31st March 2012. We don’t have to charge depreciation for 2012, do we?
Please correct and explain if I’m wrong.
November 27, 2016 at 3:08 pm
Dear John. Thank for your lecture. Great one. But please for the first time i’m so confused with a question. In question 3, i still don’t understand why we charged depreciation in 2012….which is year of sale.
Yes i understand the year ends in 31 Jan 2013 but that accounting year would have started in Feb, 2012. And the car was sold 31 March 2012. So it was sold within the accounting year and as such depreciation shouldnt be charged in that accounting year.
please help clarify.
November 27, 2016 at 5:57 pm
The year of sale is the year ended 31 January 2013, which is 1 February 2012 to 31 January 2013, and no depreciation has been charged on it during that year.
November 19, 2016 at 10:03 am
1. At 30 september 20×2, the following balances existed in the records of lambda co:
Plant and equipment:
Cost $ 860,000
Accumulated depreciation $397,000
During the year ended 30 september 20×3, Plant with written down of $37,000 was sold for 49,000. The plant had originally cost of 80,000. Plant purchased during the year cost $ 180,000. It the lambda Co’s policy to charge a full year’s depreciation in the year of acquisition of an asset and non in the year of sale, using rate 10% on the straight line Basis.
What is the carring amount that should appear in lambda Co’s Statement of financial position at 30 september 20×3 for the plant and equipment?
2. what is the different between written off and written down
November 19, 2016 at 5:36 pm
Please do not ask this sort of question as a comment on a test.
You should ask in the Ask the Tutor Forum. (Although don’t expect a full answer to a full question – you must have an answer in the same book in which you found the question, and you should ask about whatever it is in the answer that you do not understand)
November 20, 2016 at 6:08 am
John Moffat, thank alot for the explanation and guidance you have advised me. Please can you explain 2. what is the different between written off and written down?
what is the written down stand for there?
November 20, 2016 at 7:29 am
We write off debts if they are irrecoverable – that means we complete remove them.
We write down non-current assets, by depreciating them – this means we reduce their value in the Statement of financial position.
October 29, 2016 at 9:32 am
I understood answer of question 2. The data 25,000 (depreciation acc) and 10,000(the price of sale) no need for answer. In the exam,wherether abandon of data like this? Thank you!
October 29, 2016 at 1:03 pm
This question is typical of exam questions – very often not all the data is relevant. The examiner is testing that you do know which of the figures are relevant.
October 26, 2016 at 11:32 am
trully sir if yaer end is 31 jan each year.So from 1 january when the car was bought to 31 january 2008 it should 1 month .These date calculations are confusing now
October 26, 2016 at 2:02 pm
You have not said which question you are asking about.
If it is the first question, then the question says that their policy is to have a full years charge in the year of purchase.
Have you watched the free lectures on this? The lectures are a complete free course for Paper F3 and cover everything needed to be able to pass the exam well. There is no point in attempting the tests until after you have watched the relevant lectures.
July 21, 2016 at 9:08 am
Hi Sir , I’m having trouble in question 2&3 I seem to can get the right answer . Can you please guide me
July 21, 2016 at 2:06 pm
The answers pop-up with workings after you have attempted the question, so you will have to say which bit of the workings you are not clear about 🙂
(I do assume that you have watched the free lectures first?)
May 10, 2016 at 12:32 am
For question 3, how did you get the value 7084.80 for the working out of the NBV?
May 10, 2016 at 6:53 am
The accumulated depreciation up to 31 Jan 2011 is 2400 + 1920 + 1536 + 1228.80 = 7084.80
(Then add on the 983.04 for 31 Jan 2012 to get the accumulated depreciation at the date of sale )
August 29, 2016 at 1:03 pm
sorry ,but think we shouldn’t calculate dep for 2012 as in question said ( charge none of the year of sale ) , please correct me if i’m wrong !
August 29, 2016 at 1:18 pm
You are wrong, because the year of sale is the year to 31 January 2013. So there is depreciation for the year to 31 January 2012.
April 26, 2016 at 5:03 pm
Please assist me on question 5
Why is that the residual value remains unchanged after 2 years .Is it an assumption that its should not change or since we are not told otherwise we also supposed to assume that it remains the same.
April 26, 2016 at 6:07 pm
The residual value is the expected value at the end of its life. It’s total useful life has not changed and so there is no reason why it’s residual value should change (unless of course the question had said that it had changed)
April 28, 2016 at 9:05 am
okay i get it thank u sir
April 28, 2016 at 9:18 am
You are welcome 🙂
March 22, 2016 at 10:36 am
In the question 2, if we sold the machine on January 2014, why do we still depreciate it till the year end?
March 22, 2016 at 1:46 pm
Check the answer carefully – up until January all the machines are depreciated. From January to the end of the year (31 October) only the remaining machines (with a cost of 90,000) are depreciated.
March 20, 2016 at 8:57 pm
for question 2, the machine had original cost $30000 on 1 April 2012.
Is it another machine and need to depreciate in 2013 also?
In total 2 machines, one cost $120000, one cost $30000?
March 21, 2016 at 5:51 am
No – you are not reading carefully enough.
The 120,000 was the cost of the machines, and so it included the one that was later sold.
So you need to calculate depreciate on 120,000 for the months up to the date of the sale, and then for the remaining months on only 90,000 – the cost of the machines remaining.
March 16, 2016 at 11:39 pm
February 20, 2016 at 7:07 pm
Okay so I looked back carefully at the dates/workings and I understand now. Thank you!
February 21, 2016 at 8:23 am
to you says
February 18, 2016 at 6:55 am
For the question 2.
Why the depreciation in year 2014 is $15000?? They already sold the machine ay Jan 2014. I think. The calculating of depreciation in 2014 should be ended at January, not cover till october.
February 18, 2016 at 7:42 am
The 15,000 is the depreciation on the remaining machines – the ones that were not sold. Their original cost was 120,000 – 30,000 = 90,000.
February 2, 2016 at 9:30 pm
Chapter 6 Practice Ques No.3
the Correct answer is $84.80? Depreciation should not be charged in the yr of Sale that is , in 2012.
February 11, 2016 at 3:19 am
Sold in March 2012, the year end is 31 January. that’s! why ..
February 11, 2016 at 3:26 am
Because they sole in 2012 March, the year end is 31 January 2012. So need to calculate to 31 January 2012 (1year).
February 11, 2016 at 6:41 am
Yeewai: Correct 🙂
Diva: Check the dates again!
February 19, 2016 at 4:17 pm
I’m also equally as confused as Diva. If the year ended 31 Jan 2012 and the equipment was sold in March 2012, would another year not have begun 1 Feb 2012 – 31 Jan 2013? – As March 2012 is within that accounting year why are we charging depreciation for the whole year? so confused sorry.
February 20, 2016 at 7:02 am
Look at the workings that appear after you have submitted your answer.
Depreciation is charged for year ended 31 Jan 2008 (the year in which is what), 2009, 2010, 2011, and 2012.
It was sold during year ended 31 Jan 2013 and so depreciation is charged in that year because there is no depreciation in the year of sale.
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