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(b) A company acquired a machine for sh.600,000 on 1.1.2017. The machine has an economic life of 5 years. The use of the machine earned
(b) A company acquired a machine for sh.600,000 on 1.1.2017. The machine has an economic life of 5 years. The use of the machine earned the company sh. 800,000 p.a for during its economic life. Required Compute depreciation for each of its useful life using the following methods; (i) Straight line (ii) Reducing balance method at 20% p.a (iii) Sum of digits (6 marks) (c) Compute net profit after depreciation and comment. (6 marks) (d) Illustrate the following methods of provision for depreciation (i) Depletion method (ii) Unit of production method (iii) Machine hour rate (iv) Revaluation method (4 marks)
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