FA Chapter 6 Questions Depreciation
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For Question 5 can explain for me the all ? Why depreciation for the next two year need (52000-7000)/3
why ÷3 not 7year-2year=5year?
Because the question says that the remaining life is revised to 3 years.
Hi John,
Why with question 3 are does the answer include charging a full year of depreciation in the year of sale? Am I misunderstanding? I thought it was meant to be none in the year of sale as per the question.
Thanks in advance!
It doesnt include a full year in the year of sale. The year end is 31 January and so the sale was in the year ended 31 January 2013
Hi John, surely since the sale is made in year 5, and no depreciation should be charged in the year of sale, there should only be 4 years worth of depreciation charged? In the solution, 5 years worth is charged.
Check the year end again (and my previous reply)
Hi, I felt very confident about this topic, but unexpectedly, I ended up failing it. Based on the EDX course on reducing balance depreciation, I calculated it differently. But any one could tell me why they in q3 reducing balance depr. didnt folow -‘ the depreciation percentage is applied to a smaller figure each year, resulting in a lower depreciation charge each year’? Or this is not similar to Diminishing – balance depr.? Thnx
But the answer does follow that rule. (Have you looked at the answer by clicking on ‘review quiz’ after submitting your answers?)
And have you watched our free lectures on this topic?
Sir question 3 it says no depreciation charge in the year of sale, so the answer should not have depreciation for year 2012? am i wrong?
oh i was wrong about the date of sale, it turned next year
Qn 2. Why did we subtract the 30,000? Why do we have to add the depreciation expense from Jan 2014 to Oct 2014 even though the machine is sold on 1 Jan 2014?
Thank you in advance.
It was sold on 1 Jan 2014, but this is during the accounting period ending on 31 October 2014 (i.e. from 1 November 2013 to 31 October 2014).
Hi, Could you please help me to understand Q2,
Why do we have to add the depreciation expense from Jan 2014 to Oct 2014 even though the machine is sold on 1 Jan 2014?
Thank you in advance.
it is the cost of the remaining machines. Although you sell 1 machine, we need to caculate the depreciation of others. That’s why we subtract 30,000 (cost of the sold machine)