Question
1. A business purchased a machine for $60,000. The machine is expected to be used for 8 years, after which it is expected to be
1. A business purchased a machine for $60,000. The machine is expected to be used for 8 years, after which it is expected to be sold for $6,000. Using the straight-line depreciation method, how much is the annual depreciation amount?
2. An entitys financial year ends on 31 December. On 1 October it pays a 24-month magazine subscription of $600. Under the accrual system of accounting how much of the subscription will be recognized as an expense for the current year ended 31 December, and how much will be treated as an asset (prepaid subscription)?
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