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Hello John sir
Grumpy’s non current asset cost account ledger as following
Debit side as follows
Date narrative. amount
1/10/x0 Balance b/f. 92000
1/12/x0. Additions. 8000
1/6/x1. Additions. 4000104000
Credit side:
Date. Narrative. Amount
28/2/x1. Disposal. 18000
30/9/x1. Balance c/f. 86000104000
Grumpy’s policy is to depreciate it on the straight line basis over 4 years on a monthly basis fro the date of acquisition to disposal. What is the charge on depreciation on the year ended 30
September 20×1.Can you please tell how to solve this problem by step by step
Regards
Ahlam AminaWhy are you attempting a question for which you do not have an answer? You should be using a Revision Kit from one of the ACCA Approved Publishers – they have answers and workings 🙂
From 1 Oct X0 to 1 Dec X0 the cost of assets was 92,000. Therefore the depreciation for these 2 months is 2/12 x 25% x 92,000 = 3,833
On 1 Dec X0 they bought more assets for 8,000 bringing the total cost up to 100,000.
So for the period from 1 Dec X0 to 28 Feb X1 (which is 3 months) the depreciation is
3/12 x 25% x 100,000 = 6,250On 28 Feb X1 they sold assets that had cost 18,000, so the total cost falls to 82,000.
So for the period from 28 Feb X1 to 1 Jun X1 (which is 3 months) the depreciation is
3/12 x 25% x 82,000 = 5,125On 1 Jun X1 they bought more assets for 4,000 bringing the total cost up to 86,000.
So for the period from 1 Jun X1 to 30 Sep X1 (which is 4 months) the depreciation is
4/12 x 25% x 86,000 = 7,167The total depreciation for the year is obviously the total of the four calculations above.
Have you watched my free lectures on depreciation? The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
I got this question from my model exam they don’t give any percentage which I found a little difficult .
Thank u sir I got it?
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