Reference no: EM132609892

Depreciation:

The following data for a machinery is available:

Purchase price (incl. 20%VAT) 360 000 EUR

Salvage value (excl VAT) 10 000 EUR (incl VAT: 12,000 euro)?

useful life 7 years

(=estimated service life)

production capacity 580 000 hours

1st year: production (2006) 120 000 hours

2nd year: production (2007) 160 000 hours

3rd year: production (2008) 130 000 hours

4th year: production (2009) 80 000 hours

5th year: production (2010) 50 000 hours

6th year: production (2011) 40 000 hours

7th year: production (2012) 30 000 hours

Total hour working: 610,000

Question a) Calculate the straight-line depreciation. (straight-line method): 51,428 euro?

Question b) Calculate the depreciation based on the activity method. (Price - Salvage value) : production capacity = 0.6 euro.?

Question c) What other depreciation methods do you know?

units of production

sum-of-years digits

double-declining balance

accelerated depreciation method

Question d) Calculate the depreciation for 2006 and the book value (31.12.2006) in accordance with the Austrian (taxation) regulations (straight-line) if the machinery has been purchased at 30 May 2006.

Question e) Calculate the depreciation for 2006 and the book value (31.12.2006) in accordance with the Austrian (taxation) regulations (straight line) if the machinery has been purchased at 5 August 2006.