1.2.a

Your organisation has purchased a new photocopier at a cost of $17,000. The purchase was made in July so there is no need to calculate depreciation for part of the first year. The copier has an expected life of five years.

Using the diminishing value method and the prime cost method, detail the cost each year to be allocated for reporting purposes and show the book value during each year.

Document your results in the table, comparing the two methods.

	Diminishing Value	Prime Cost
Cost per annum	Book value	Cost per annum	Book value
At purchase
Year 1
Year 2
Year 3
Year 4
Year 5

Attach filesSave

1.2.b

Identify and briefly explain the two systems an organisation can use to calculate and pay its Goods and Services Tax (GST) obligations.