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Mr Moffat practise question 6 I dont understand, answer of average investment why Residual value 15,000 is added ? it seems already in 100,000 initial investment Gold is not paying another 15,000 ?
If there was no scrap value then the average investment in the Statement of financial position would be 100,000 / 2 = 50,000.
Since there is a scrap value and therefore the value of the investment falls to 15,000, not zero, then the average value in the SOFP will be higher at (100,000 + 15,000) / 2 = 107,500
I do suggest that you watch our free lectures on this, because I cannot type out the whole lecture here.
Our lectures are a complete course for Paper F9 and cover everything you need to be able to pass the exam well.
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