- This topic has 3 replies, 3 voices, and was last updated 12 years ago by
.
- Posts
ON OPEN TUITION REVISION NOTES PLEASE REFER TO THE QUESTIONS OF DEPRECIATION (QUESTION 2 (B)). HOW IS THE ANSWER OF OPEN TUITION FOR REVALUATION RESERVE AS AT 31.DEC.2011 £195,000? THE ORIGINAL COST DEPRECIATION IS SHOWN AS £120,000/30 TO GET £4000. HOW IS THIS CALCULATION COMING? PLEASE EXPLAIN. THE ORIGINAL COST WAS £20000 THEN HOW DID IT BECOME £120,000 AND THE ORIGINAL USEFUL LIFE WAS 50 YEARS THEN WHY IS THE CALCULATION DIVIDING BY 30 YEARS. SHOULDN’T THE ORIGINAL COST DEPRECIATION BE 20,000/50? TO GET 400?
PLEASE REPLY ASAP. I HAVE AN EXAM TOMORROW. THANKS.
If you type in CAPITAL letter again – and call topic URGENT
your post will be deleted..1) posting in capitals is regarded as shouting and rude
2) all topics on the forums are urgent! and urging posters to reply is also rude and many people will probably ignore your post!!all this violates the rules
https://opentuition.com/forums/forum-rules/Sorry – there is an error in the answer – I will have it corrected.
The depreciation based on the original cost should indeed be 400 (2% of 20,000) and not 4,000.
Because of this, the amount transferred from the revaluation reserve should be 7,000 – 400 = 6,600.
This would give a balance remaining on the revaluation reserve of 198,000 – 6,600 = 191,400.
Sorry about that 🙁
<cite> @johnmoffat said:</cite>
Sorry – there is an error in the answer – I will have it corrected.The depreciation based on the original cost should indeed be 400 (2% of 20,000) and not 4,000.
Because of this, the amount transferred from the revaluation reserve should be 7,000 – 400 = 6,600.
This would give a balance remaining on the revaluation reserve of 198,000 – 6,600 = 191,400.
Sorry about that 🙁
Thank you for clarifying. However, the accruals of rent (in the accruals question) at the end of the year should be £12,000 and not 6000, so correct this too, please.
- You must be logged in to reply to this topic.