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fa2 cbe jan -june 2013 examiner report

Forums › FIA Forums › General FIA Forums › fa2 cbe jan -june 2013 examiner report

  • This topic has 0 replies, 1 voice, and was last updated 11 years ago by cameillia.
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    Posts
  • September 12, 2013 at 4:05 pm #140367
    cameillia
    Member
    • Topics: 3
    • Replies: 0
    • ☆

    I have a problem in relation to the answer to this question which was outlined on the CBE FA2 Jan-June 2013,
    Kina depreciates equipment using the
    straight line method over an asset’
    s useful life. On 1 June 2012 she
    bought new equipment with a useful life of 5 years and paid the supplier $16,000. The invoice showed that the
    total was made up as follows:
    $
    Equipment 12,600
    Delivery 600
    Installation 800
    Maintenance for year to 31 May 2013 2,000
    What is the total charge to
    Kina’s income statement for the year to 31 May 2013?
    A
    $4,800
    B
    $5,920
    C
    $3,200
    D
    $2,800

    In the answer it says installation is recorded as revenue expenditure and the other three items are recorded as capital expenditure? I am confused here since I thought that installation was part of capital expenditure?

    I would like to take this opportunity to thank the opentuition team and the administration for providing this website, it is very much appreciated.
    Thanks in advance.

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