Calculate depreciation using the units-of-production method

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Question - Crafty kevin purchased a new truck for his gardening and landscaping business on 1 January 2019 at a cost $ 68,200 GST inclusive . The estimated residual value is $7,000. The truck has a useful life of 5 years and the business expects to use it for 160,000 Kilometers. it was used for 22,000 Kilometers in year 1 ; 30,400 Kilometers in year 2 ; 28,000 Kilometers in year 3; 34,500 kilometers in year 4; 32,600 Kilometers in year 5. The end of financial year is 30 June.

Required -

(a) Calculate depreciation using the straight- line method for 2019 and 2020?

(b) Produce a depreciation schedule for the first 3 years ending 30 June using the diminishing balance depreciation method. Assume the depreciation rate to be double the straight- line rate.

(c) Calculate depreciation using the units-of-production method ( based on Kilometers) for 2019 and 2020?

Reference no: EM132846223

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