Help with calculating NBV - June 06 FRA past paper
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Hi guys
This morning I have been looking at the Jun 06 FRA paper, task 1.4 and am slightly confused - maybe it's just too early!
The question is to calculate the NBV during the year and we know the following:
You are told that the company's year end is 31 March.
During the year some equipment was part-exchanged.
- Bought in Sept 2003 for £1200.
- Part-ex allowance of £300.
- Depreciation calculated at 35% on reducing balance basis.
- Full year's depreciation charged in acquisition year and none in year of disposal.
I know how to calculated the NBV, but when you look at the answer - the last NBV calculated is y/e 2005.
How do you know which year the asset was part exchanged?
The answer booklet shows the NBV as £507 at y/e 2005 which I could work out fine, but why would you stop at 2005?
Nowhere does it tell you which year the asset was part-exchanged!
It says 'during the year', so i was thinking as the paper is 2006 the last y/e would have been 31 march 2006 - so why is this not the case? Previous questions are asking to prepare accounts at 31.03.06.
What am I missing?
This morning I have been looking at the Jun 06 FRA paper, task 1.4 and am slightly confused - maybe it's just too early!
The question is to calculate the NBV during the year and we know the following:
You are told that the company's year end is 31 March.
During the year some equipment was part-exchanged.
- Bought in Sept 2003 for £1200.
- Part-ex allowance of £300.
- Depreciation calculated at 35% on reducing balance basis.
- Full year's depreciation charged in acquisition year and none in year of disposal.
I know how to calculated the NBV, but when you look at the answer - the last NBV calculated is y/e 2005.
How do you know which year the asset was part exchanged?
The answer booklet shows the NBV as £507 at y/e 2005 which I could work out fine, but why would you stop at 2005?
Nowhere does it tell you which year the asset was part-exchanged!
It says 'during the year', so i was thinking as the paper is 2006 the last y/e would have been 31 march 2006 - so why is this not the case? Previous questions are asking to prepare accounts at 31.03.06.
What am I missing?
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Re:Help with calculating NBV - June 06 FRA past paper
It's ok - I get it now. I was right - is it too early for this!
As it was part-exchanged in 2006, no depreciation is charged in 2006 - therefore the last NBV is calculated at 31 March 2005.
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