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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › How did the examiner arrive at depreciation and additions amount?
Hello!
This qn is referring to KODIAK COMPANY (DEC 09).
How did they arrive at the figures? Can you please specify where I could be wrong.
depr = 10% * 1266 = 127
additions = 127 + (1266*1.20) – 1266 = 380
Thank you.
Firstly, note 1 of the question says that the depreciation is 10% on the balance before the accumulated depreciation – so it is 10% of cost.
Secondly, the investment in new NCA’s grows by 20%. So 66 x 1.2 = 79.
Therefore the cost of NCA’s is 1,266 + 79 = 1,345
Therefore depreciation is 10% x 1,345 = 134.