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What would be the amount of accumulated depreciation

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Question - Bennetts Ltd purchased equipment 1 July 2017. The equipment cost $36,000 and the installation of the equipment costed an additional $8,000. The equipment would have a useful life of ten (10) years and a salvage value of $4,000.

Required -

a. What is the cost of the equipment to Bennetts Ltd?

b. What would be the amount of accumulated depreciation and the carrying value of the asset at the 30 June 2020, if we were to use the straight-line depreciation method?

c. What would be the amount of accumulated depreciation and the carrying value of the asset at the 30 June 2020, if we were to use the diminishing balance method of depreciation?

d. If we sold the vehicle for $30,000 at the 30 June 2020 what profit or loss would occur under b. and c.?

e. What does the residual amount represent?

Reference no: EM132995067

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