Calculate annual depreciation charge for each of six year

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On 1 July 2015 Eagle Ltd, which has a year-end of 30 June, purchased a delivery truck for use in its courier operations at a cost of $65 000. At the end of the truck's useful life it is expected to have a residual value of $5000. During its six-year useful life, Eagle Ltd expected the truck to be driven 246 000 kilometres.

REQUIRED

Problem 1: Calculate the annual depreciation charge for each of the six years of the truck's life using the following methods:

a) the straight-line method

b) the sum-of-digits method

c) the declining-balance method

d) the units-of-production method using kilometres as the basis of use and assuming the following usage:

Year.         Kilometres

2016.          28,000

2017.          34,000

2018.           42,000

2019          55,000

2020.          68,000

2021.          19,000

Reference no: EM132631480

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