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The example with Ruta co there was a gain on disposal of 7000 and a loss charged to admin expenses 5000. I checked the answer but didnt c these figures were used. Y
In fact, we HAVE used them, but not in any visible way
If I set up three columns for the Administrative Expense line item, we can sub-divide the end figure of 70 into “discontinued” and “continuing”, as follows:
Total ….. Disco ….. Conti
72 60 12 (opening position necessary to arrive at closing position!)
7 – 7 (gain on disposal, credited to administrative expenses)
65 60 5 (sub-total)
5 – 5 (attributable closure costs charged to administrative expenses)
70 60 10 (final allocation of 70 administrative expenses)But, you are correct! The detail is not necessary for us to arrive at the end position …. because the figure of 10 is actually given to us in the question
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