- This topic has 5 replies, 5 voices, and was last updated 12 months ago by chippychipz.
- October 31, 2017 at 5:00 am #413808neversyes
In the exam there’s one question regarding to depreciation. Ask to calculate useful life of the asset providing cost 100K, residual 6K, accumulated 23K, depreciation for the year 43K. Can anyone help as a bit confused how can the accumulated is smaller than the depreciation for the year? And how to calculate useful life?
ThanksNovember 4, 2017 at 5:15 pm #414324Christine
I think I had a very similar, if not the same, question on my BA3 exam in July, to me it’s obviously wrong. I think I just looked at the answers they provided and had to do some backwards engineering to figure out which figure they’d gotten wrong to then choose the right answer.November 8, 2017 at 11:38 am #414826neversyes
The question I got is an open question, filling in the year so no choice. Not sure if anyone else has the same question?January 5, 2019 at 8:23 am #500051solomonc
I could be possible that part of the equipment/ machinery is disposed off and moved to disposal. And a new machinery is purchased thereafter.October 24, 2019 at 8:47 am #550597christopherjonny
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I feel like we might need a little more to go on in order to calculate the useful life, is it straight line/reducing balance method, do they give a depreciation %, a purchase date and a financial cycle period?
As they are only referring to a single asset costing 100k I assume that the asset was purchased part way through the year so the 23k Acc Dep is only for a few months rather than a full financial year cycle, and in the following year a full years depreciation is calculated (43k).
I passed BA3 about a month ago and I wouldn’t stress to much on this question, it seems like you need to assume a little more than required to complete the question. As long as you understand Acc Dep doesn’t HAVE to be more than depreciation (as above for eg.) you’ll be fine to calculate the rest. If there’s more info to the question I’d be happy to help.
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