Question

Stacey Ltd purchased a new machine on 1 September 2019 at a cost of $243,000 (excluding...

Stacey Ltd purchased a new machine on 1 September 2019 at a cost of $243,000 (excluding GST).   
The entity estimated that the machine has a residual value of $28,800 (excluding GST).
The machine is expected to be used for 42,000 working hours during its 10 year life
Assume a 31 December year-end.   
Required   
(a) Calculate the depreciation expense using the straight-line method for 2019 and 2020.
(b) Calculate the depreciation expense using the diminishing-balance method and a depreciation rate of 25% for 2019 and 2020.
(c) Calculate the depreciation expense using the units-of-production method for 2019, assuming the machine usage was 1.820 hours.
(d) On 31 December 2020 the company discarded a delivery truck that was purchased on 1 January 2016 for $23,650 cash including
GST of 10% and was depreciated on a straight line basis with a useful life of 6 years and a residual value of $2150 (excluding GST).
What was the profit or loss on the scrapping of the truck?
Business   Accounting   
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