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Excess depreciation & pup

This topic has 1 reply, 2 voices, and was last updated 7 years ago by MikeLittle.

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May 21, 2017 at 12:40 pm #387241
couragenew
Participant
- Topics: 26
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Hello tutor,
With regards to question 3 in the mini exercises on the above topic
Kindly help me understand how you arrived at the adjustment of 800 as shown in the answer.
Following your simplified method in the lectures, I had 1m-(1M÷2.5)=600k
May 21, 2017 at 5:37 pm #387278
MikeLittle
Keymaster
- Topics: 27
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There’s only a half year depreciation to consider
Profit on transfer is $1m and that represents $200,000 for each half year
So out of that profit of $1m, $200,000 is realised so only $800,000 is the pup at the end of the year
OK?
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