CAPITAL EXPENSES urgent info needed
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Ive just looked at a past paper on BTC, I noticed that a capital item had been purchased and an expense (installation) had been incurred. The expense was added back to the net profit as a disallowable. BUT
when I came to calculate the FYA the expense had been deducted from the cost of the machinery.
Now, I always thought that the expense was added to the cost of purchase to reach an overall capital amount, and therefore, the FYA would be available for all the cost?
Am I to presume that this was included in the initial cost as written down and therefore must be deducted from the wda or am I completely lost.
Any simple explaination would be helpful.
Exams tomorrow!!
when I came to calculate the FYA the expense had been deducted from the cost of the machinery.
Now, I always thought that the expense was added to the cost of purchase to reach an overall capital amount, and therefore, the FYA would be available for all the cost?
Am I to presume that this was included in the initial cost as written down and therefore must be deducted from the wda or am I completely lost.
Any simple explaination would be helpful.
Exams tomorrow!!
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Comments
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Re:CAPITAL EXPENSES urgent info needed
Are you referring to the June 2004 exam? If so, the installation cost of £2200 was added to the cost of the machinery (£15400). The FYA was calculated on the total figure of £17600.0 -
Re:CAPITAL EXPENSES urgent info needed
No, we were given an in-class one. I think one which was constructed for folkes lynch books.
the amount in the notes to expenses was say 5500, it also stated an asset had been purchased for 24000.
then calculating the fya, it was 24000-5500*40%.
It made no sense and I have looked all through the BPP books and found absolutely nothing. I have left the paper at college with the tutors and asked them to explain it but ...suprise... heard nothing.0 -
Re:CAPITAL EXPENSES urgent info needed
Just had a look, it is the same paper, but the numbers have been edited. Looks like my idea was right but although the question paper had been edited, the answer sheet had not.
cheers
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