- This topic has 3 replies, 2 voices, and was last updated 10 years ago by
.
- Posts
Hi sir
plz explain how TDA is calculated??
again confused!it is 1250 * .1 = 125
and balancing allowance is 500.Why not deducted scrap value of 500 from 1250 and tda (1250-500)*.1 =75
I assume by TDA you mean tax allowable depreciation! (Don’t call it TDA in the exam – the market will have no idea what you mean 🙂 )
The cost is 1250, so the depreciation is 125 per year.
After 4 years deprecation the written down value will be 1250 – (4 x 125) = 750.
The sale proceeds are 500, so the balancing allowance is 750 – 500 = 250.(The examiners answer shows the 250 as two separate figures, which is a bit silly but is the same in total).
It might help you to watch the lectures where I work through the whole of this question.
You can find the links on this page:
- You must be logged in to reply to this topic.