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Dear sir,
This is a question from Kaplan
Disposed asset : 2200
It has been purchased earlier for 5000, with an expected residual value of 500.
Depreciated on reducing balance basis – 20%
I got this question wrong because I subtracted the residual balance first from 5000 then I started the 20% depreciation.
however, Kaplan’s answer did not minus the 500 and they straight started with 5000*0.20. Don’t we have to minus the residual balance in reducing balance method? only during straight line?
thanks sir
Reducing balance depreciation ignores the residual value. It is only in straight line depreciation that is it taken into account in the calculation of the depreciation.
I do suggest that you watch my free lectures on this.
The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.Thank you, sir. I have watched your videos. I must have somehow missed this part, myapologies.
Another question, sir. i am sitting for my exam tomorrow and I have just started revising now (very late, I know but I am going to give my best)
I am now doing chapter by chapter of Kaplan;s revision kit. Do you think I should use bpp or Kaplan sir? i unfortunately can’t do both books because I have less than 12 hours before my exam 🙁
Or is there anything else I can do (besides having good time management and studying earlier next time)
thanks sir
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