1. Explain the term 'depreciation'. 2. List three method of depreciation. 3. What do you understand by the term a. Useful life b. Accumulated depreciation 4. A firm bought a lorry for RM50,000. The lorry is expected to last four years and its salvage value at the end of the four years is RM30,000. Using the straight-line method, calculate the book value of the lorry at the end of the second year. Construct a depreciation schedule for years using the straight-line method. 5. A machine costing RM20,000 has a life expectancy of three years and salvage value of RM2,000. Using the declining balance method, calculate the annual rate of depreciation. Construct a depreciation schedule. 6. The cost of a machine is RM10,000 and its salvage value after four years is RM2,000 Construct a depreciation schedule of the machine using the sum-of-year digits method.