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Example 1 Chapter 4 SCF

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Example 1 Chapter 4 SCF

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by P2-D2.
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  • July 3, 2018 at 11:11 pm #460876
    Anna
    Participant
    • Topics: 31
    • Replies: 15
    • ☆

    Hello, in ex 1 ch 4 on SCF the balancing figure on PPE a/c (cash additions) needs to be found to be included in the SCF. The question states the b/f amt (26 574), c/f amt (43 282), depreciation charge for the year (4 658) and disposal amt (1 974). The B/F and C/F amounts taken from the SFP given in the question are already net of accumulated depreciation and I understand that the accumulated depreciation includes already the depreciation charge for the passing year, doesn’t it? If this is the case, why do we deduct the depreciation charge for the year again while working out the missing figure? Isn’t it doubling? Please help me understand. Thank you very much!

    July 4, 2018 at 8:05 pm #460976
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7212
    • ☆☆☆☆☆

    Hi,

    The depreciation charge for the year is not included within the opening carrying value of the PPE and therefore the depreciation adjustment will need to be adjusted for in the T-account. The other side of the entry is to the depreciation expense in the SPL.

    Thanks

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