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3. BBK Company bought an equipment to manufacture machine parts for Rs 5,600,000. The equipment was expected to be useful for 5 years and an
3. BBK Company bought an equipment to manufacture machine parts for Rs 5,600,000. The equipment was expected to be useful for 5 years and an estimated residual value of Rs 280,000. The equipment is expected to manufacture 350,000 parts. It manufactured 105,000 parts in year 1; 84,000 in year 2; 21,000 in year 3; 112,000 in year 4 and 28,000 parts in year 5. Required: Compute the depreciation expense for each year under the following methods: (a) Straight-line; (b) Written-down-value; (c) Production units [10 Marks]
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