Reference no: EM133133843
Question - A. Mr Marshall operates a sound recording studio in Bangsar. Ushered in by the new year's enthusiasm, he purchased new equipment for his studio on 1 January 2020. The new recording equipment costed RM65,000. The equipment is expected to last in 10 years or 87,000 recordings. In 2020, 3,800 hours were recorded, and in 2021, 5,600 hours were recorded. The residual value is RM5,000.
Required -
i) Compute the depreciation charges for the year 2021 using the following methods: a. Straight-line b. Units-of-production c. Double-declining-balance.
ii) Prepare the depreciation schedule for the year 2020 and 2021 for the abovementioned methods.
B. Range Mover focuses its business on transportation of freight items. The company has a few lorries to run its business. However, on 1 July 2021 the company decided to dispose of one of its lorry due to the decrease in demand of its logistics service. The purchase price was RM75,000. The following are the details on the disposal: - Accumulated depreciation as of 31 December 2020: RM60,000 - Yearly depreciation charge: RM7,500 - Selling price: RM15,000
Required - Disclose the accounting treatment for the disposal by clearly showing the gain or loss from the disposal.
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