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Credit , debit and Test question about Sale Tax , and PP&E

HHaSupporter11y ago
Hi , I have some problems with the " Credit , " Debit " and some test questions here . Please help 1. " A company purchased a machine for 50,000$ on 1-1x1 . The machine has 5 year useful life and residual value of 5,000 . On 31 Dec 20x2 , 15,000 was spent in ugrading the machine ; Therefore its useful life was extended to 5 years with residual value was expected to be 2,000$ . On 1 July x3 , the asset was revalue at 54,000 $ , residual value remained the same , At the end of year x4 , due to a declined market of the products , the asset was sold at 18,000$ . Caculate the gain/loss on the disposal and extract the FSs at the end of year x4 2. A bussiness commenced with capitak in cash of 1000$ . Inventory costing 800$ plus sales tax is purchased on credit , and half is sold 1000$ plus sales tax , the customer paying in cast at once . The sales tax rate is 20% . What would the accounting equation after these transaction show And about the increase and decreases of " Credit , debit " . I don't understand it at all . I'm just done from chapter 1 - 3 ( The regulatory framework , The accounting information system and sales tax ) , but i just can understand 30 % of it , but I can't do maths . Can you help , pls ? Thank you so much
John MoffatJohn MoffatTutor11y ago#1
I am not surprised that you cannot answer these questions, because they cover areas that are not dealt with in the three chapters that you have listed!!!! I am happy to explain them, but it will not make much sense to you until you have covered more. Can I suggest that you watch our free lectures (in chapter order). If you then look at these questions, they should make sense. If they do not, then obviously ask again.
HHaSupporter11y ago#2
Thanks for the advise ,John
John MoffatJohn MoffatTutor11y ago#3
You are welcome :-)
John MoffatJohn MoffatTutor11y ago#4
You answer is correct, except that the depreciation per year after the revaluation should be 52000/4.5 which gives 11,556 per year. This results in a carrying value at the date of sale of 36,666 and hence a loss of disposal of 18,666.
HHaSupporter11y ago#5
Hi Nishan , the answer is correct . Which book are studying for F3 ? Hi John . I really need your supporting for this F3 . It's harder and harder everyday . I can't catch what the teacher said
John MoffatJohn MoffatTutor11y ago#6
Ha: I don't know why you say the answer is correct when I had just explained where his mistake was! Sorry you can't catch what I say in the lecture - try repeating it with higher volume. If you have specific problems then do ask here and I will do my best to help.
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