Salamandar Ltd recently paid \($400\) 000 for new equipment. Management policy is to keep equipment for a period of 5 years. The estimated residual value is \($40\) 000. As a trainee accountant, the manager of Salamandar Ltd has asked you to prepare a schedule to compare the impact alternative depreciation methods will have on the net profit of the company. Ignore GST.

Required Prepare a schedule, using the template below, to present the annual depreciation expense and end-of-year carrying amount for the expected life of the equipment on the basis of:

(a) Straight line depreciation

(b) Diminishing balance method

Transcribed Image Text:

Straight Line Diminishing Balance Depreciation Carrying Depreciation Carrying Year Expense value Expense value Acquisition 1 2 23 3 4 5