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Question
Calculate straight-line, diminishing-balance and units-of-production depreciation. LO4 Tops Ltd purchased a new machine on 1 October 2018 at a cost of $228000. The entity estimated that the machine has a residual value of $28000. The machine is expected to be used for 40000 working hours during its 10-year life. Assume a 31 December year-end.Required Calculate the depreciation expense using the following methods in the year indicated: (a) the straight-line method for 2018 and 2019. (b) the diminishing-balance method using double the straight-line rate for 2018 and 2019. (c) the units-of-production method for 2018, assuming the machine usage was 1800 hours.
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