# disposal of acreage HELP

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Registered Posts: 1,800 Beyond epic contributor 🧙‍♂️
really confoosed now lol

june 98, p bought 50 acres for £300,000
feb 03, p sold 20 acres for £180,000

remaining 30 were valued @ £250,000

Mar 09, p sold remaining 30 for £350,000

February 2003 disposal:
cost of 20 acres = 300,000 x 180,000 / 180,000 + 250,000 = £125,581

Remaining cost for the 30 acres = £174,419

now

WHAT<HOW< WHY< WHERE?????

surely 300,000 x 180,000 / 180,000 is 300,000??????

please someone tell me where i am going wrong as this just seems silly!!!

• Registered Posts: 210 Dedicated contributor 🦉
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The formula is Original cost x A/(A+B)

with A being proceeds and B being market value of remaining land.

So forumla is 300,000 x 180,000/(180,000 + 250,000)

300,000 x 180,000/430000 = 125581

My first post answering so hope the above makes some sort of sense!
• Registered Posts: 1,800 Beyond epic contributor 🧙‍♂️
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clear as mud now, thanks

in the answers from the AAT there are no brackets - as in my post. it would have made so much more sense if the brackets were included, as i can work it out from there.

thanks

Tracy
• Registered Posts: 1,954 Beyond epic contributor 🧙‍♂️
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Current value of land is

20 acre £180
30 acre £250
total £430

So to work out the purchase cost of the amount sold you use that proportion, to split up the 300;

original cost 300 x (180/430) = 125,581

and purchase cost of remaining;

300 x (250/430)