FRA Past Paper Wed 7 Dec 2005 Afternoon Help!!
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Can anyone help me with question 2.1 in relation to point
c)Sam James part-exchanged his business vehicle during the year.
• The original cost of the vehicle which was part- exchanged was £12,000.
• The net book value of the vehicle which was part-exchanged was £6,144.
• £10,000 was paid from the bank account. The amount was credited to the bank account and debited to the vehicles at cost account.
• A part-exchange allowance of £3,500 was given.
You can have a look at the past paper on this site.
My queation is it states on the trail balance that the total vehicle cost is 22k. if the new vehicle costs 13.5k including part exchange and you get rid of the original vehicle cost of 12k should this not leave you with 23.5k in the fixed asset costs
Is the 10k they mention in part c not part of the 13.5k and if you have a look at the way they sit it out in the trial balance the had 10k and 12k credited on the same line.
Any help please.
c)Sam James part-exchanged his business vehicle during the year.
• The original cost of the vehicle which was part- exchanged was £12,000.
• The net book value of the vehicle which was part-exchanged was £6,144.
• £10,000 was paid from the bank account. The amount was credited to the bank account and debited to the vehicles at cost account.
• A part-exchange allowance of £3,500 was given.
You can have a look at the past paper on this site.
My queation is it states on the trail balance that the total vehicle cost is 22k. if the new vehicle costs 13.5k including part exchange and you get rid of the original vehicle cost of 12k should this not leave you with 23.5k in the fixed asset costs
Is the 10k they mention in part c not part of the 13.5k and if you have a look at the way they sit it out in the trial balance the had 10k and 12k credited on the same line.
Any help please.
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Comments
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Re:FRA Past Paper Wed 7 Dec 2005 Afternoon Help!!
Dont forget the purpose of this exercise is caluclate the actual motors at cost figure because you are making an adjustment after the initial trial balance has been set.
Therefore, I can see why you are saying that the Motors at cost is £23.5k. But dont forget, the £22k includes the £10k payment made.
Original £22 was
- disposal £12k
- 10K payment
new vehicle £13.5k
= balance £13.5k.
If you look at the accumilated dep charge you reduced that by the value of £5856 before calculating the new dep charge. This is thw whole amount £12000 - NBV £6144 = £5856.0 -
Re:FRA Past Paper Wed 7 Dec 2005 Afternoon Help!!
With regards to that question, my tutor at Premier Training recogns it's an error. He says the final figure for vehicles should be 22k-12k+10k. I'm even more confused now!!
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Re:FRA Past Paper Wed 7 Dec 2005 Afternoon Help!!
You could check the suggested answers in the resource centre. All the previous papers have got the answers available too. I know I struggled with that particular question myself, so I am hardly in a position to help. I thought that Dec 05 FRA was a very hard paper compared with the previous ones I'd seen and practised on, but all credit to you for having a go at it yourself.0