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Stars Ltd purchased a machine for $110,000 (net of GST) on 1 October 2019, The additional costs incurred in the installation of the machine in the factory was $10,000. The machine is estimated to have 5 years useful life with residual value of $20,000.
Required:
Problem 1: Assuming the financial year ends on 30 June, calculate the depreciation expense for the years ended 30 June 2020 and 30 June 2021 using the following methods:
i) Straight-line method of depreciation.ii) Diminishing-balance method of depreciation.
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