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Hello SIr,
My doubt is in 3rd question of depreciation under FA Practise questions on open tuition.
The year end is 31st Jan. So the accounting year would be 1st Feb-31st Jan.
So,
Depreciation for the month Jan 2008(part of previous year 1/2/2007 – 31/1/2008) : 12000*20%*1/12= $200.
12000-200= 11800
1st Feb 2008 – 31st Jan 2009: 11800-20%= 9440
1st Feb 2009 – 31st Jan 2010:9440-20%=7552
1st Feb 2010 – 31st Jan 2011:7552-20%=6041.6
1st Feb 2011 – 31st Jan 2012:6041.6-20%=4833
1st Feb 2012 – 31st March 2012: 4833*20%=967
967*2/12= 161
4833-161= 4672
Thus profit on sale is 5000-4672= 328And the question also mentioned not to depreciate in the year of sale(a full year’s charge in the year of purchase and none in the year of sale). So we shouldn’t right?
Sir correct me if I am wrong anywhere
Thank YouGiven that the question says there is a full years depreciation in the year of purchase, why have you only charged 1 months depreciation? Similarly, the question says no depreciation in the year of sale, why have you charged two months depreciation?
Have you watched 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.
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