Calculate the depreciation expense

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Question - Depreciation method:

Nevertire Ltd purchase a delivery van costing $52000 net of GST. It is expected to have a residual value of $12000 at end of its useful life of 4 years or 200,000 kilometres.

A. Assume the van was purchase on 2 July 2015 and that the accounting period ends on 30 June. Calculate the depreciation expense for the year 2015-2016 using each of the following depreciation methods:

1. Straight-line,

2. Diminishing balance,

3. Units production (assume the van was driven 78000 kilometers during the financial year).

B. Assume the van was purchase on 1 October 2015 and that the accounting period ends on 30 June. Calculate the depreciation expense for the year 2015-2016 using each of the following depreciation methods:

1. Straight-line,

2. Diminishing balance,

3. Units production (assume the van was driven 60000 kilometers during the financial year).

Reference no: EM132072419

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