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Hi,
I did the chapter about the depreciation and I think I have understood the syllabus, however I have a question about Example for (Chapter6) pag 41
The example says that Melns sells the car on 30 sept 2004. My understanding is:because we sell the car before the end of the year we have to calculate the portion of the depreciation for the year:
In this example we sell the car in September (company still owns the car from January to September), shouldn’t the 9/12 being expensed in the depreciation account for year 2004? $2800/12/9=2100Could you please help me to understand why the depreciation for year 2004 is 700? (2800/12/3) from Setp to October:
Thanks
Gabbi
The example follows on from example 3 on the previous page.
If you look at example 3, Melns year end is 30 June each year.
He sells the car on 30 September, which means that in the accounting year of sale (1 July 2004 to 30 June 2005) he has owned the car for 3 months – 1 July 2004 to 30 September 2004. Therefore 3 months depreciation.
Dear John,
Now it is clear. Thanks a lot. I have been learnig a lot with Opentuition and your support.
Many thanks.Gabbi
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