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2. Eastern Construction Bhd purchased a new excavator machine to be used for its current construction project. The cost of the excavator machine is RM
2. Eastern Construction Bhd purchased a new excavator machine to be used for its current construction project. The cost of the excavator machine is RM 200,000. Before it was put into use, the company painted the excavator machine at a cost of RM 3,000 to reflect the company's corporate identity. In addition, because of the specialized nature of the construction project, the company spend an additional RM 5,000 to enhance the capacity of the engine. The useful life of the excavator machine is 5 years with a residual value of RM 15,000. The annual mileage of the excavator machine is expected to be 50,000 miles for each of the 4 years and 20,500 miles in the fifth year, total 220,500 miles. As there are various methods of depreciation, the company is yet to decide on the choice of the depreciation methods such as: 1. Straight line depreciation 2. Units of production 3. Double-declining balance Required a) For each of the depreciation methods above, prepare a depreciation schedule (in table form) showing the asset cost, depreciation expenses, accumulated depreciation and the book value for each of the 5 years. (Note: allocation of marks: 1. (3 marks), 2. (8 marks) & 3. (6 marks) = 17 marks) (17 marks)
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