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Cash Flow - NCA

AAccountaholic12y ago
Sir, Can you please help me solving this question? It is a note in Cash Flow question. I am not sure how I should calculate NCA and related figures - disposal, depreciation etc. (Statement of Cash flow for the year ending 31.3.14) The details of NCA are: Cost Accu Dep NBV At 31.3.13 27500 10200 17300 At 31.3.14 37250 12750 24500 During the year there was a major refurbishment of display equipment. Old equip that had cost $6m in Sep 09 was replaced with new equip with a gross cost of $8m. The equipment manufacturer has allowed Ryetrend a trade in allowance of $500,000 on the old display equipment. In addition to this Ryetrend used its staff to install new equipment. The value of staff time used is $300,000 but this has not been included in the cost of an asset. All staff costs have been included in operating expenses. All display equipment held at the end of the financial year is depreciated at 20% on its cost. No equipment is more than 5 years old. Thank you.
MikeLittleMikeLittleTutor12y ago#1
Well, I make it that we must have bought $7,750 as well as paying cash of $7,500 for the equipment that is specifically mentioned. Depreciation for the year is, according to my calculations, $7,350 ( It should be more and would be if they had correctly included the labour costs of installation) Loss on disposal of old equipment is $700 and there are no proceeds of disposal. If this does not coincide with the official answer, I can only suggest that you have not given me full information!
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