[petestudentacca]

Answer say it is B (Kaplan book)

Explanation: The computer does not qualify as inventory drawings as it is for the use of Nicky’s family member in their role as administrator to the business.

The computer is being transferred from inventory to non-current assets by debiting the non-current assets account. It is no longer part of cost of sales and is removed from cost of sales by a credit.

Our proffessor told us that sometimes Kaplan has wrong answers. what do you think?

[petestudentacca]

Hello, please can you explain me this question:

Vernon Vinyl purchased some new equipment on 1 April 20X1 for his mobile disco for $6,000.

The estimated scrap value of the new equipment in 5 years’ time is estimated to be $400.

Vernon charges depreciation on the straight line basis, with a proportionate charge in the period of acquisition.

What should the depreciation charge for the plant be in Vernon’s accounting period of twelve months to 30 September 20X1?

idk how to get solution, thanks!

[petestudentacca]

for 5) TRANSACTION they told this Purchased goods for $300 cash

The purchase represents the recognition of a new asset (inventory) and a corresponding reduction in cash, so there is no change in the accounting equation, only a change in the composition of the assets. It has a reduced cash balance but now has inventory at a cost of $300.

Assets = Equity + Liabilities
1650 = 650 + 1000

I do not get this q, so if i pruchased goods, then cash is reduced for 300, and inventory is in plus for 300 Right?

Thnk you

[Author]

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