CFA Mock Errata purchase, morning, advise, price, takes

BC_MBA_student

Does anyone know if there's an errata for this years L2 Mock. Their answer to Question #27 of the morning session takes the gain on sale less accumulated depreciation to calculate cap gains. The CFA text indicates that book value (purchase price less accum dep) is used to calculate cap gains. Please advise. Thanks

lucasg85

No it is right. We need to subtract Depreciation Recapture from Gross Gains in order to get Cap Gains. In this example Depreciation Recapture is Total Accumulated depreciation because Selling price > Purchase price.



Edited 1 time(s). Last edit at Sunday, May 22, 2011 at 09:17PM by jimmykaw.