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Chapter 8/example 3
Pup calculation
Dep 2009 40000 45000Could you please explain how these two number come?
If Linas had NOT sold the ppe to Asta, Linas would have charged one more year’s worth of depreciation on the item of plant that had cost $200,000 and was being depreciated over its useful life of 5 years.
At the time of sale to Asta, there were 2 remaining years of estimated useful life, so Linas would have charged $40,000
As it was, Linas DID sell the plant to Asta for $90,000 and Asta will have charged depreciation for 1 year on the plant over its estimated remaining useful life of 2 years so will have charged $45,000
OK?
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