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hi,
sir can you please show me the solution of question no 3 in the way you did in lecture. The way you used instead of the old way in which you used to solve.It’s actually done in the old way. In your lectures you told another way to solve. Can you please do the solution in that way.
What I used to do was have the same two columns – in the first I would show the “history” of the asset from its original purchase date and its accumulated depreciation and carry on down in that column as though the asset had not been transferred, so I could work out this year’s depreciation and the carrying value at the end of this year.
In the right hand column I would show the transfer value and the depreciation since transfer and the actual carrying value
Then I would compare depreciation this year with what it would have been if we hadn’t transferred and compare carrying value at the end of this year with what it would have been if we hadn’t transferred
So now I know 1) profit on transfer 2) difference in depreciation charges and 3) difference in carrying values
But I don’t need all that – it’s long winded and you can’t always do it – you’re not always given the history of the asset
So, if I were you, I would get used to the way now shown in the notes. The reason why the other way is referred to as “the old way” is because it’s no longer current! There’s a quicker, easier way – the way shown in the notes
Or do you mean ….
Profit on transfer / number of years remaining useful life?
In this case it’s $1,000 / 2.5 years = $400 per annum
and there’s just 6 months from date of transfer to accounting year end so the applicable depreciation figure is $200
OK?
sir one thing more I need to ask you is that in the same question we are crediting accumulated depreciation with $35000. Why?
Isn’t that the charge for the remaining part of the year after revaluation, based on the revalued amount and the remaining useful life?
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