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Hi
I am studying for Level 3 and I had a look at that paper (I have the ninth edition but the paper is still the level 3- June 2007). This is my interpretation …
On the TB- the depreciation for the year is not registered yet, so the motor vehicles look like this:
Cost= 60,000:
- made of -A- 10,000(the one that is going to be sold)
-B- +50,000(one or more vehicles)
Depreciation =10,000
- made of 3,400 for -A- the one that you sell (10,000-6,400)
+6,400 for -B- the 50,000
NBV = 50,000
- made of 6,400 for -A- -the 6,400 NBV is given to you at the point when you sell it
+43,600 for -B-
At the end of the year 31 Dec 2006 you register the depreciation in full
So the BS is going to be:
Cost: =50,000 representing vehicle -B-
You don’t have the -A- vehicle -is sold
Depreciation:
-for -B- is going to be 15,120= 6,400+ 8,720 [as 20% x (50,000-6,400) ]
NBV= 50,000-15,120= 34,880
Hope it makes sense….let me know
Good luck with your studies
Cosmin
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