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Calculate depreciation expense that A-R Limited will claim

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Question - A&R Limited purchased a sorting machine for $150,000 on 1 January 2016. Freight cost for the sorting machine was $1,500 and installation cost were $2,000. All prices are GST exclusive. The policy of the company is to depreciate machinery at a rate of 20% annually using the diminishing value method.

Part 1: Cost - Determine and calculate the cost of the Sorting Machine that A&R Limited is going to depreciate.

Part 2: Depreciation Calculation 2016 - Calculate the depreciation expense that A&R Limited will be able to claim for the 2016 income years for the Sorting Machine. SHOW ALL WORKINGS.

Prepare the journal entries to record the depreciation expense for 30 June 20X6.

Part 3: Depreciation Calculation 2017 - Calculate the depreciation expense that A&R Limited will be able to claim for 2017 income year for the Sorting Machine. SHOW ALL WORKINGS.

Prepare the journal entries to record the depreciation expense for 30 June 2017.

Reference no: EM133063308

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