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Good afternoon Mike,
I have a question regarding mini exercises from excess depreciation & PUP, on question number 3 according to the answers there is a depreciation from 1,000. I understand the figure of 800 in the journal entry but I don’t get from where are the 1,000 taken. Thanks for the clarification!
Cheers!
If you understand the 800 then you must understand the 1,000!
800 is calculated as 1,000 – 200 as per the diagram above the journal entry in the answers
Hi Mike,
But I don’t exactly get why it is divided into 5 periods, sorry for the silly question :/
Cheers!
well it says that the transferred was on 1st October 2010 and that at this date there were two and a half years of remaining life for the plant. The financial statements need to be prepared for 31.03.2011. That’s why I got the confusion, thanks for the clarification.
Ok, so 2.5 years and the transfer was half a year before the year end that we’re looking at.
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