I dont know why, but the answer to the asset sale $8k cash collection,cost $40k, accumulated depreciation, CFO question 5k less just clicked in the my head! I was tossing up between 27k or 37k for accumulated depreciation. I actually guessed 37k but now i think it was correct because Cost 40K Accum Dep 37K BV 3K Cash collection 8K Gain on sale 5K
Your concept is right but calculation is wrong: The Loss on the asset is the BV - proceeds from sale. where: BV = Cost - Accum Dep. The Loss is deducted from Net Income but should be added back to get CFO. So, Loss = 8000 i.e. Cost - Accum Dep - Proceeds from sale = 8000 40000 - x - 5000 = 8000 x = 40000 - 8000 - 5000 x = 27000 The answer was 27000.
adb58 - your numbers are different because you probably had set 1010 exam and the 5k and 8k were opposite data in the 2020 and 1010 question papers. TokyoBBB got it right at 37k. since cfo was less by 5k than NI (gain taken out.). so by selling at 8k, the gain was 5k. so 40 -37 =3k +5k =8k (including 5k gain)
Hmm. Were there different versions of the paper? Cos if I didnt remember wrongly, I had the same asnwer as TokyoBBB. CFO 5K less means that there was a gain on the sale of assets…and if I didnt remember wrongly U have to subtract gain on sale to get CFO. Thus, the carrying value was 3k. Acc dep=40k-3k=37k.
Hydrogen where did you take the exam? most of asia and australia had 2020 (same numbers as TokyoBBB).Not sure though about North america and europe. they probably had 1010/1111
guys, it’s only the second day after the exam, and you guys are already redoing the questions from the exam, what are you gonna do 25 days from now before the results are out?
I sat for it in Singapore. So it will be the same as TokyoBBB’s paper.