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The ABC, a computer manufacturing organization, is using building “ALFA–I” as manufacturing department while building “ALFA–II” for its administrative work. As a “Manager Accounts”, you are required to advice to the Accountant of the organization with logical reason regarding the treatment of depreciation of the building “ALFA–I” as direct or indirect manufacturing expense. Also explain to him that in which heads of the “Income Statement” the depreciation of “ALFA-1” and “ALFA–II” will be reported.

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MGT101_2ND GDB IDEA SOLUTION 


According to IAS16 depreciation should be charged as an expense in Income statement whether tangible assets are used for production departments or admin dept.......

plz GDB ki statment samjha de koi :-S mujhe tou statment he samajh nahi ai.. :-S

pl z can  anyone tell me about  the detail of GDP......

koi to statement clear kr den..

The building ‘ALFA-1’ is being used for manufacturing purpose so the depreciation of this building should be treated as direct manufacturing expense. The direct manufacturing cost can be divided into three types which are direct labor cost, direct materials cost and factory overhead. So the depreciation of this building should be treated as directed manufacturing expense.

The depreciation of ALFA-1 will appear in the cost of the goods sold in the income statement as it is a direct manufacturing cost comes under factory overhead.

The depreciation of the ALFA-2 will appear in the interest expense or general administration expense.

yeah..plz koi statement clear kr day??

Anyone tell me about GDBs 211 toa day is last day

Fixed Assets

Fixed assets are the assets of permanent nature that a business acquires, such as plant, machinery,

building, furniture, vehicles etc.

Fixed assets are presented at cost less accumulated depreciation OR revalued amount.

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