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I have a problem on this question, I am writing it down.
“Habib purchased a copyright on 30 April 2003 for Gbp31,320. The remaining life of the copyright at the date of purchase was 30 years. On 30 April 2019, Habib sold the copyright for GBP 27900.”
Calculate allowable gain or loss.
My answer to this question was GBP 11,196, but question has computed it as GBP 13,284.
If I am wrong in any of the concept, please help me clarify it.
ThankyouHave you watched the OT lecture and worked through the relevant study notes (?)- as you should then have got the correct answer! Let me know when you have done this and if you have then understood the answer.
answer
Net book value=31320/30=1044
use full value=1044*17=17748
cost when purchased=31320
cost when sold=31320-17748=13572
sold = 27900
less cost = (13572)
gain = 14328 answersSale Proceeds 27,900
Cost 31,320
Less:
16/30 x 31,320 = (16,704) (14,616)Gain 13,284
Not sure how this presentation will distort when i submit this answer but I think your only error on your revised answer above is that you have reduced the cost by 17 years instead of 16 years!
Hi, May also add the question to the other wasting chatles please.
I am confused by the approaches in calculation of allowable cost for eg copyrights. I have compare Open Tuiton approach with the Kaplan Text book (page 625, chapter 20). Simlar question but the allowable cost is calculated in two different way which gives the different answer:
– In your notes the is the reduction in original cost by P/Lx (C-S)
– in the Kaplan text book the formula is different; allowable cost = original cost x Remining life at disposal/ estimated useful lifePlease, please could let us know why there is a difference and which way is right way?
many thanks Annahi Sir, Please ingore my message I have worked out that you ca used both methods, and each is as good. thank you
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