On 1 July 2019 Sprintfast Couriers Ltd, which has a year-end of 30 June, purchased a delivery truck for use in its courier operations at a cost of $65 000. At the end of the truck’s useful life it is expected to have a residual value of $5000. During its sixyear useful life, Sprintfast Couriers Ltd expected the truck to be driven 246 000 kilometres.

REQUIRED

Calculate the annual depreciation charge for each of the six years of the truck’s life using the following methods.

a. The straight-line method

b. The sum-of-digits method

c. The declining-balance method

d. The units-of-production method using kilometres as the basis of use and assuming the following usage:

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Year Kilometres 2020 28 000 2021 34 000 2022 42 000 2023 55 000 2024 68 000 2025 19 000 246 000