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BBP ACCA Revision Kit pg 97 Question 282

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › BBP ACCA Revision Kit pg 97 Question 282

  • This topic has 3 replies, 2 voices, and was last updated 4 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
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  • August 4, 2020 at 4:32 pm #579222
    nirvana25
    Member
    • Topics: 18
    • Replies: 45
    • ☆☆

    I tried to understand the answer for this question but got mixed up for the figures mentioned for Capital Employed end of 20×2

    Can you please explain from it got such figures?

    August 4, 2020 at 5:06 pm #579243
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54679
    • ☆☆☆☆☆

    The capital employed at the start of the year was 2M + 0.2M = $2.2M but right at the beginning of the year they bought a new machine which increased the capital employed to 2.2 + 0.8 + 0.1 = $3.1M

    At the end of the year, the assets are the same but depreciation will have been deducted. On the existing assets the depreciation is 0.4M and on the new machine it is 0.8/4 = 0.2M. So total depreciation of $0.6M.

    So the total at the end of the year is 3.1 – 0.6 = $2.5M

    The mid-year value (the average) = (3.1 + 2.5) / 2 = $2.8M

    August 5, 2020 at 7:56 pm #579373
    nirvana25
    Member
    • Topics: 18
    • Replies: 45
    • ☆☆

    Thanks a lot for your explanation

    August 6, 2020 at 8:47 am #579401
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54679
    • ☆☆☆☆☆

    You are welcome 🙂

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  • The topic ‘BBP ACCA Revision Kit pg 97 Question 282’ is closed to new replies.

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