Oman Cement Company has bought a machinery for RO 85,000 with an estimated useful life of...
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Oman Cement Company has bought a machinery for RO 85,000 with an estimated useful life of 7 years. Ms. Safia, an Accounting Manager, is responsible to calculate the depreciation and record in the books of accounts. She is confused in selecting the method of depreciation like WDV or Straight line method. She came to know that the expected scrap value at the end of its useful life is RO 15,000. a) Find out the book value of the machine after 7 years using WDV method and Straight line method. b) Critically compare WDV method and straight line method. c) What does it mean if the scrap value of the machine is more? Discuss considering depreciation and useful life. Oman Cement Company has bought a machinery for RO 85,000 with an estimated useful life of 7 years. Ms. Safia, an Accounting Manager, is responsible to calculate the depreciation and record in the books of accounts. She is confused in selecting the method of depreciation like WDV or Straight line method. She came to know that the expected scrap value at the end of its useful life is RO 15,000. a) Find out the book value of the machine after 7 years using WDV method and Straight line method. b) Critically compare WDV method and straight line method. c) What does it mean if the scrap value of the machine is more? Discuss considering depreciation and useful life.
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Answer rating: 100% (QA)
a To find out the book value of the machine after 7 years using the WDV Written Down Value method and Straight Line method we need to consider the initial cost of the machinery the estimated useful li... View the full answer
Related Book For
Intermediate accounting
ISBN: 978-0077647094
7th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
Posted Date:
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