Sunrise Ltd purchased a new machine on 1 October 2020, at a cost of $96,000. The company estimated that the machine will have a residual value of $12,000. The machine i
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Get it written →Sunrise Ltd purchased a new machine on 1 October 2020, at a cost of $96,000.
The company estimated that the machine will have a residual value of $12,000. The machine is expected to be used for 10,000 working hours during its 5-year life.
Required:
Calculate the depreciation expense under the following methods.
Straight-line for reporting period ended 31 December 2020. [5 marks]
Diminishing balance using double the straight-line rate for 31 December 2020 and the year ended 2021. [5 marks]
Units of production for reporting period ended 31 December 2020, assuming machine usage was 1700 hours. [5 marks]
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