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Let $\mathbb{Q}^+$ be the set of positive rational numbers with operation $a * b = \frac{ab}{2}$. What is the identity element $e$ such that $a * e = a$ for all $a \in \mathbb{Q}^+$?
For identity: $a * e = \frac{ae}{2} = a$, so $ae = 2a$, thus $e = 2$.
Motor vehicles costing $530,000 were depreciated at 10% straight-line instead of the correct 25%. After incorrect entries: Motor vehicles at cost $530,000; Provision for depreciation $53,000. Which journal entries will correct the error?
Option C is correct.
Correct depreciation = $530,000 × 25% = $132,500
Already charged = $530,000 × 10% = $53,000
Additional needed = $132,500 − $53,000 = $79,500
Entry: Debit Statement of profit or loss $79,500 | Credit Provision for depreciation $79,500
Under what condition would factory overheads be considered 'over absorbed'?
Over absorption occurs when the overhead absorbed (Rate $\times$ Actual Activity) is higher than the actual overheads incurred.
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