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Calculate depreciation expense for year using straight-line

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Reference no: EM132525361

Nevertire Ltd purchased a delivery van costing $52 000. It is expected to have a residual value of $12 000 at the end of its useful life of 4 years or 200 000 kilometres. Ignore GST

Question (a) Assume the van was purchased on 2 July 2019 and that the accounting period ends on 30 June. Calculate the depreciation expense for the year 2019-20 using each of the following depreciation methods:

i. straight-line

ii. diminishing balance

iii. units of production (assume the van was driven 78 000 kilometres during the financial year).

Question (b) Assume the van was purchased on 1 October 2019 and that the accounting period ends on 30 June. Calculate the depreciation expense for the year 2019-20 using each of the following depreciation methods:

i. straight-line

ii. diminishing balance

iii. units of production (assume the van was driven 60 000 kilometres during the financial year).

Reference no: EM132525361

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