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September 23, 2023 at 2:55 pm
For qs 3, it says not depreciating on the year of a sale so why do we still take depreciation of that year into account as well?
John Moffat says
September 24, 2023 at 2:37 pm
We do not. The year end is 31 January each year. The sale is on 31 March 2012 which is during the year ended 31 January 2013.
August 2, 2023 at 5:23 pm
Where it has been told in question 2 that 30000 of machine is part of 120000, I was regarding it as a separate part. If it says in question that it’s a part then it’s plausible to deduct 120000-30000, or else it’s not.
August 2, 2023 at 8:53 pm
There is no machine!
The question says that they purchased a car and then later they sold it. Therefore there is no doubt that what they sold was the same car.
July 27, 2023 at 11:08 am
Hi, in Q3 i didn’t understand from where you 7,048.80 and why you add 983.04 ?
July 27, 2023 at 5:01 pm
It is to calculate the total depreciation they have charged. Did you watch mt free lectures on this before attempting the test?
July 27, 2023 at 11:05 am
July 3, 2023 at 9:08 pm
Hi,in question 5 i am a bir confused on why we multiply 2*15000 as to my understanding we have 3 remaining years left,so why are we multiplying 15000 by 2.Can you please explain
May 26, 2023 at 10:49 am
teacher, what’s “nbv at date of sale” mentioned in feedback of question 3? Thankyou
May 27, 2023 at 9:35 am
NBV is the net book value (or the carrying value). Have you watched our free lectures on this?
February 3, 2023 at 6:27 pm
sir for question 2 2nd part the cost of machine would have been already depreciated by 8500(6000+2500).so it should be (120000-21500)*20%*(10/12) right?
February 4, 2023 at 9:04 am
No. The question says that it is straight line depreciation.
February 4, 2023 at 10:10 am
but the machine is more than a year old does that changes the cost of machine?
February 4, 2023 at 3:59 pm
No – straight line depreciation is based on the original cost. Have you watched my free lectures on tis?
February 4, 2023 at 5:41 pm
yes sir i have watched it completely.so you are saying that there will be no depreciation for the period from april 2012 to october 2013 for that machine as its cost remain same as of the purchase date?
February 5, 2023 at 9:15 am
I am not saying that at all. There is depreciation for the entire period that the machine is owned. but the cost doesn’t change and straight line depreciation is based on the original cost.
February 5, 2023 at 10:48 am
another query accumulated depreciation is also mentioned in que.if we take original cost then why that 25k did not taken into consideration while calculating depreciation?
February 5, 2023 at 2:28 pm
We never do when using straight line depreciation.
September 27, 2022 at 6:53 pm
I got 80%. I don’t understand question 2. Why 120,000-30000. I don’t understand
September 28, 2022 at 7:56 am
Have you checked the answer that appears when you review the quiz?
October 24, 2022 at 7:50 am
Total machines: 120,0000 Sold a machine with originally cost: 30,000 => we must minus this figure.
February 4, 2023 at 6:06 am
but the machine is more than 1 year old no so the value should be less than the original cost
February 4, 2023 at 9:01 am
that is wrong
February 4, 2023 at 9:05 am
What is wrong? (The answers to the quiz are correct 🙂 )
February 14, 2022 at 3:25 pm
in question 3 ,,,…it is specically written none in the year of disposal then why u considered 2012……can u plz explain
February 15, 2022 at 9:37 am
The 983.04 is the depreciation for the accounting year ended 31 January 2012. The sale occurred on 31 March 2012 which is in the accounting year ended 31 January 2013 (i.e. between 1 February 2012 and 31 January 2013).
January 24, 2022 at 8:16 pm
Hi from my side as well. Thank you for an amazing info and quiz. May i ask you please in Question 2 – why if we sell the building in January 2014, we book the depreciation till end of the year end? I assume that we need to stop till Jan and the real NBV till that date and then check the profit or loss. Thank you in advance Nadya
January 25, 2022 at 7:29 am
We do not charge depreciation on the asset sold until the year end. For the first 2 months the assets were costing 120,000 and so there is depreciation on 120,000 for two months. After selling an asset that had cost 30,000, the remaining assets must have cost 90,000 and they will be depreciated for the remaining 10 months.
The NBV is of no relevance because it is straight line depreciation, and the profit or loss on sale is not relevant for this question because it only asks for the depreciation expense.
January 17, 2022 at 7:15 pm
Sir, if there isn’t any depreciation charged for the year of sale, why is the figure of 983.04 added ?
January 18, 2022 at 7:53 am
I assume that you are referring to question 3. The 983.04 is the depreciation for the accounting year ended 31 January 2012. The sale occurred on 31 March 2012 which is in the accounting year ended 31 January 2013 (i.e. between 1 February 2012 and 31 January 2013).
January 19, 2022 at 4:48 pm
Ah! Thank you Thank you Sir, clearly I wasn’t paying enough attention.
I do Appreciate your prompt response!
November 26, 2021 at 6:20 pm
At 31 December 2004 Q, a limited liability company, owned a building that cost $800,000 on 1 January 1995. It was being depreciated at two per cent per year. On 1 January 2005 a revaluation to $1,000,000 was recognised. At this date the building had a remaining useful life of 40 years. What is the depreciation charge for the year ended 31 December 2005 and the revaluation reserve balance as at 1 January 2005?
Please help me for this question thanks
November 26, 2021 at 6:18 pm
October 2, 2021 at 8:31 pm
at question 3. None in the year of sale it mean no need to depreciation for 2012 .In answer I alittle confused . Please kindly explain it. sorry for my English.
October 3, 2021 at 8:01 am
The company year end is 31 January and so the year of sale is the year ended 31 January 2013 and there is no depreciation for this year.
October 3, 2021 at 10:15 am
I get it , Thank you so much Sir
October 3, 2021 at 3:50 pm
You are welcome 🙂
September 2, 2021 at 1:42 pm
All thanks belong to Allah to start with. Thanks to OpenedTuition for this very good help. I just read the material and did the quiz or test with regards to this topic and scored 100% Special thanks to you, Mr. John Moffat
September 2, 2021 at 3:26 pm
Thank you for your comment 🙂
August 24, 2021 at 6:40 pm
At question 5 the machine was used between 2001 and 2003 that is 3 years but there are four years depreciation calculated on the answer. Before checking the answer I calculated 70,000 – (9,000+9,000+15,000) but there is an additional 15,000 where did it come from ?
Thanks In Advance
August 25, 2021 at 8:11 am
The machine was bought on 1 January 2000 and sold on 31 December 2003, which means that there are 4 years of depreciation. The first 2 years the depreciation is 9,000 per year and for the second 2 years it is 15,000 per year.
February 18, 2021 at 4:54 pm
Hi John, I have a question regarding question 2. Do we just assume the depreciation policy is without any scrap value at the end of life of use?
Thank you so much for the channel, It has been a tremendous help for me!
February 19, 2021 at 7:41 am
If it is straight line depreciation given as a %, then it is always a % of cost (even if you are given a scrap value).
In all cases, if there is no scrap value given then we assume that there is no scrap value – you cannot invent a figure!!
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