An item of plant is acquired at a direct cost of $110 000. It requires installation and modifications amounting to $20 000 and $10 000, respectively, before it is efficiently operational. It is expected to have a useful life of six years, at which point it will have a residual value of $15000.

REQUIRED

Provide the depreciation entries for the first two years using:

a. The sum-of-digits method

b. The declining-balance method

c. The straight-line method