Al Hajar Electronics LLC Asset Acquisition and Depreciation

On $1$st April $2022,$ Al Hajar Electronics LLC$,$ a company based in Oman specializing in retailing high$-$quality electronic goods, acquires a new refrigeration system for its main warehouse from CoolTech Solutions. The financial and operational details of the purchase are as follows:

OMR:

List price of the refrigeration system: $62,000$

Import duty: $1,200$

Delivery fees: $1,750$

Installation costs: $6,500$

Pre$-$production testing: $3,600$

Purchase of a four$-$year service agreement with CoolTech Solutions: $5,500$

Additionally, Al Hajar Electronics LLC was granted a trade discount of $15\%$ on the initial list price of the refrigeration system and a settlement discount of $5\%$ if payment was made within $30$ days of purchase. The payment for the refrigeration system was completed on $20$th April $2022.$

The refrigeration system is estimated to have a useful life of $8$ years with a potential salvage value of OMR $6,250$ at the end of its use. The estimated usage is $70,000$ cooling hours over its lifetime.

In the year $2022,$ Al Hajar Electronics LLC uses the refrigeration system for $900$ hours. Calculate Depreciation Charges for Al Hajar Electronics LLC for $2022$ and answer related questions $(8$ Marks Total $1$ mark for each$)$

Using the straight$-$line method $.$

Applying the activity method based on cooling hours for $2022.$

Implementing the sum$-$of$-$the$-$years' digits method for $2022.$

Calculating using the diminishing $($written down$)$ value method for $2022.$

Which Depreciation method provides the highest deduction in the final year of an asset's life?

Which depreciation method produces a constant periodic expense as an asset depreciates?

What is the difference between Depreciation for financial reporting purposes and tax purposes?

Which method provides a larger Depreciation deduction under an accelerated$-$cost recovery system?