Economics, Accounting & Business: Post your doubts here!

[Taiyaba]

No it is from the book (as and a level accounting by Harold Randall) chapter 11 page# 54 MCQ# 3 nd the answer is $11400

 

[Taiyaba]

Depreciation-2002:
32000-13600=18400 x 30% = 5520
Dep-2003=4200
Total dep: 4200+5520=9720
cost=39000
nbv= 29280

The answer is $11400

 

[shanky631]

Nbv at 1 april 2002= 32000-13600
=18400
add additional fixed assets worth 7000. Now the net asset value of total fixed assets is 25400

but the depreciation provided is 4200 which means that some fixed assets have been disposed off so we can divide 4200/0.3 to find the amount on which dep has been calculated. It comes around 14000.

now subtract 25400-14000=11400 this is the net book value of assets disposed.

 

[shanky631]

got itt??

 

[SalmanPakRocks]

Nbv at 1 april 2002= 32000-13600
=18400
add additional fixed assets worth 7000. Now the net asset value of total fixed assets is 25400

but the depreciation provided is 4200 which means that some fixed assets have been disposed off so we can divide 4200/0.3 to find the amount on which dep has been calculated. It comes around 14000.

now subtract 25400-14000=11400 this is the net book value of assets disposed.

Why wouldn't we calculate the depreciation for the first year?

 

[Taiyaba]

got itt??

Yup thnx bt y will v divide 4200 by 0.3?

 

[shanky631]

Yup thnx bt y will v divide 4200 by 0.3?

to find the amount of asset on which depreciation is calculated bcoz we don't calculate dep on disposed assets.

 

[shanky631]

Why wouldn't we calculate the depreciation for the first year?

bcoz it is already included in the figure of accumulated depreciation at 1 april 2002.

 

[Taiyaba]

to find the amount of asset on which depreciation is calculated bcoz we don't calculate dep on disposed assets.

Thnk u

 

[shanky631]

Thnk u

welcome

 

[SalmanPakRocks]

bcoz it is already included in the figure of accumulated depreciation at 1 april 2002.

Thanks for the explainations, I'll contact my Sir for this one.

 

[ks136]

bcoz it is already included in the figure of accumulated depreciation at 1 april 2002.

Silly mistake =p ...u r ri8

 

[Taiyaba]

I hv one more question

The following information is extracted from the books of a business.
At 31.12.02
Fixed assets (at cost) _$ 230000
Less accumulated depreciation _$85000
At 31.12.03
Fixed assets (at cost) _ $275000
Less accumulated depreciation _ $98000

Further information for the year ended 31 December 2003 is as follows.
Depreciation charged in the Profit and Loss Acccount - $25000
Additions to fixed assets (at cost) - $60000
Loss on sale of fixed assets - $1000

How much was received from the sales of fixed assets?

 

[ks136]

_______________________F.A a/c(NBV) 2003_________
b/f 145000................................................................. Dep 25000
Bank 60000................................................................ Disposal (bal)3000
......................................................................................c/f 177000

NBV=3000
loss=1000
Bank=3-1=2000

 

[Taiyaba]

_______________________F.A a/c(NBV) 2003_________
b/f 145000................................................................. Dep 25000
Bank 60000................................................................ Disposal (bal)3000
......................................................................................c/f 177000

NBV=3000
loss=1000
Bank=3-1=2000

Thnx a lot

 

[ks136]

Silly mistake =p ...u r ri8

lyk krny ki waja? SalmanPakRocks parthrocks shanky631

 

[Taiyaba]

I dnt gt ths question
Carriage inwards in a trial balance is $2300. It has been entered in the trading account as $3200. In addition, motor expenses of $600 been posted to the motor vans account
What effect has this had the trading and profit and loss account?
Please someone explain this :/

 

[parthrocks]

I dnt gt ths question
Carriage inwards in a trial balance is $2300. It has been entered in the trading account as $3200. In addition, motor expenses of $600 been posted to the motor vans account
What effect has this had the trading and profit and loss account?
Please someone explain this :/

Hello Taiyaba
look!!
Carriage refers to the costs of transporting goods to and from the firm. In the past, the purchase of goods would often result in two charges – the cost of the goods purchased and the cost of having them delivered to the business premises.
From the buyer’s point of view, the delivery charge would he referred to as “carriage inwards”. Any such carriage charges should be debited to debited in the trial balance!!
as the carriage inward had been written as 3200 instead of writing it as 2300 on teh debit side in the trail balance!!ok
so now we are overstating the amount by 900!!note that!!and now!in the trading account as the carriage inward is added as an expense in the cost of goods sold!!it will mean that now we are deduting extra 900 also so the profit will get overstated by 900!!!
the other entry says that motor expense is 600 which is posted to motor van account soit will incraese the profits as cos we are nt including the expense in profit and loss account which is the fault of an unexperineced accountant pagal hai!!!thus and now the total effect of both the entries would be like this:-

900(profit increase hoga)
+600(profit incraese hoga)=1500(the amount by which the profits would be overstated if this is der)

 

[Taiyaba]

Hello Taiyaba
look!!
Carriage refers to the costs of transporting goods to and from the firm. In the past, the purchase of goods would often result in two charges – the cost of the goods purchased and the cost of having them delivered to the business premises.
From the buyer’s point of view, the delivery charge would he referred to as “carriage inwards”. Any such carriage charges should be debited to debited in the trial balance!!
as the carriage inward had been written as 3200 instead of writing it as 2300 on teh debit side in the trail balance!!ok
so now we are overstating the amount by 900!!note that!!and now!in the trading account as the carriage inward is added as an expense in the cost of goods sold!!it will mean that now we are deduting extra 900 also so the profit will get overstated by 900!!!
the other entry says that motor expense is 600 which is posted to motor van account soit will incraese the profits as cos we are nt including the expense in profit and loss account which is the fault of an unexperineced accountant pagal hai!!!thus and now the total effect of both the entries would be like this:-

900(profit increase hoga)
+600(profit incraese hoga)=1500(the amount by which the profits would be overstated if this is der)

Thnx a lot for explaining carriages in so much detail
Bt the answer is:
Gross profit understated by $900
And Net profit overstated by $300

 

[parthrocks]

I dnt gt ths question
Carriage inwards in a trial balance is $2300. It has been entered in the trading account as $3200. In addition, motor expenses of $600 been posted to the motor vans account
What effect has this had the trading and profit and loss account?
Please someone explain this :/

Are u talking about the effects when correcting it!!!