Various depreciation methods On 1 December 2021, Aigo Ltd acquired additional equipment at a cost of $120 000, less a trade discount of 25 per cent. The terms of payment were 2/10, n/30. Payment was made on 20 December 2021. Freight charges were $7500 and installation and testing cost $2500. The equipment was installed in the factory and ready for use on 1 January 2022.

The equipment was expected to have a useful life of five years and a salvage value of $4500. During its life, the equipment was expected to produce 850 000 units of output. During the year ended 30 June 2022, the equipment was used to produce 80 000 units.

Calculate the depreciation expense to be charged in the accounts of Aigo Ltd, with respect to this new equipment for the financial year ended 30 June 2022, using:

1 the reducing balance method (assuming a rate of 50 per cent)

2 the straight-line method 3 the units-of-production method.