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https://www.accaglobal.com/ca/en/student/exam-support-resources/fundamentals-exams-study-resources/f8/cbe-specimen-exams.html# hello mam, i don’t understand this mcq num 6 in the speciman paper can you explain please?
You mean this one?
Which of the following correctly calculates the depreciation expense for the new assets for the year ended 31 December 20X4 and explains the resultant impact on non-current assets?
Depreciation should be $10,660, assets are understated
Depreciation should be $18,583, assets are understated
Depreciation should be $9,111, assets are overstated
Depreciation should be $12,549, assets are overstatedTop left of the left screen you should see a “light bulb” icon and next to it the words “Explain answer” which provides the following:
Depreciation should be calculated as:
Treadmills/exercise bikes = (18,000 + 17,000)/36 x 8 months = 7,778
Rowing machines/cross trainers = (9,750 + 11,000)/36 x 5 months = 2,882Therefore total depreciation is $10,660 and assets are currently understated as too much depreciation has currently been charged.
Is that ok?
Yes this question!! But why they are adding treadmills and exercise bikes together and why divide by 8 month?
Same for rowing machine why they divide by 5 month?Treadmills and exercise bikes were both purchased in May – so the monthly depreciation (cost divided by 36 months) has to be MULTIPLIED by 8 months (May-Dec inclusive).
Rowing machines and cross trainers were both purchased in Aug – so the monthly depreciation has to be MULTIPLIED by 5 months (Aug-Dec inclusive).
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