Calculate depreciation:

1. The straight line method. Residual value of the machine is 0. The straight line depreciation

rate: 20%. Calculate the net value (the balance sheet value) as at 31st December 20X7.

A B C D E F G H 1 NAME: ID NUMBER: W N Exercise 1 On 20th May 20X4 the entity purchased a production machine for 40 000. The entity got an invoice 4 for transport of the machine stating a payable amount of 4 000. The calculated cost of the machine 5 assembly was 2 000. On 1st of June 20X4 the machine was taken into active use. 6 Required: 7 Calculate depreciation: 8 1. The straight line method. Residual value of the machine is 0. The straight line depreciation 9 rate: 20%. Calculate the net value (the balance sheet value) as at 31st December 20X7. 10 11 Answer n rate per Depreciation d Accumulate 12 Year Depreciable Depreciatio Book value base year n depreciation end of year 13 2004 14 2005 15 2006 16 2007 17 18 19 2. The straight line method. Residual value of the machine is 10 000. Useful life - 10 years. 20 Calculate the net value (the balance sheet value) as at 31st December 20X8. 21 22 Answer Accumulate 23 Year Depreciable Depreciatio n rate per Depreciation d Book value base year depreciation end of year 24 2004 25 2005 26 2006 27 2007 28 2008 29 30 31 3. The entity applies the accelerated depreciation method. The straight line depreciation rate: 32 20%. Accelerating factor - 2 (turn back to the straight line method when the annual depreciation 33 amount is lower than the amount calculated with the straight line method). Residual value of the machine is 0. 34 35 Answer Accumulate 36 Year Depreciable Depreciatio n rate per Depreciation d Book value base year depreciation end of year 37 2004 38 2005 39 2006 40 2007 41 2008 42 43 44 45