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Dear Sir,
I have a doubt with this question from the BPP revision kitKaplow purchased a machine for $30,000 on 1 January 20X5 and assigned it a useful life of 12 years. On 31 March 20X7 it was revalued to $32,000 with no change in useful life.
What will be depreciation charge in relation to this machine in the financial statements of Kaplow for the year ending 31 December 20X7?
Well, according to my calculations the answer comes $3025 when I split it year wise, but the answer in the kit says $3047, having split it month wise
Which one do you reckon is right?
Thanks!
I don’t get it to be either of those!
My calculation shows:
30,000 / 144 x 3 = 625 (144 months estimated useful life 3 months for the period 1 January, 20X7 to 31 March, 20X7)
+
32,000 / 117 x 9 = 2,462 ( 117 months and 9 months for the period 1 April, 20X7 to 31 December, 20X7)
Gives me a total of $3,087
Does the book not show you a working?
??????
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