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Dear Mike,
I don’t understand “CR Cost of sales 24,000” – last line in Answer 2. Isn’t that 24,000 been capitalized?
Shall other plant be included in depreciation with the manufactured plant?
First (128,000-32,000)*12.5%*1/2=6,000 (31.3.07 – 30.9.07)
Then (96,000-6,000)*12.5%*1/2=5,625 (1.10.07 – 31.3.08)
Then (90,000-5,625+24,000)*12.5%*1/2 (1.4.08 – 30.9.08)Is the question designed to be this complicated or I’m thinking wrongly too much?
And again, investments info (26,500 / $27.1 m) not used. That’s huuuuge increase!
Thank you!
“The details of its cost, which is included in cost of sales …..” explains why Dr TNCA 24,000 Cr Cost of sales 24,000
There appear to be some typos in the question! For example, Land and buildings valuation should be at 1 October, 2007 and Accumulated depreciation should be at 1 October, 2007 also
And you’re correct again, the investment valuation is not used and should be shown as 27,100 ( skip the millions! )
The question in the notes is a lift from a past exam question, Llama, and maybe I cut and pasted too many lines!
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