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the 2.5 amended pilot paper question titled Winger (bpp revision kit Q5) has thrown me off a bit. in the solution depreciation is being added to the cost of sales. there is no note in the question advising such. kindly enlighten me as to why we are adding depreciation to the cost of sales.
Hello from a fellow student!
I’ve just done this same very question a couple of days ago. I found that it is often the case when depreciation expense is a part of cost of sales. I think it’s quite normal. However, sometimes I see a note specifically requesting to do this, and sometimes not. I believe that if you don’t include it in the cost of sales, but deduct it together with other expenses, you won’t be penalised for that as there is no note asking to do that in this case with Winger.
Hope it helps 🙂Steve Scott most frequently states that depn should be included as a cost of sale item. Occasionally he doesn’t. If there is no contrary instruction within the question ( like Winger ) include within cost of sales, but show clearly what you have done so the marker can see where you have expensed it
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