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can I get help with this questions Question 7 - Deep End Gear (7 marks) On 1 March 2019 the business, purchased new computer equipment
can I get help with this questions
Question 7 - Deep End Gear (7 marks) On 1 March 2019 the business, purchased new computer equipment from IT Pros. The owner has been advised to calculate annual depreciation on either 25% straight line or 40% reducing balance. The tables below show the amounts on 30 June for each method. Straight Line Method Depreciation Accumulated Carrying Value Expense Depreciation 2019 700 700 7700 2 100 2021 4 900 3 500 2020 2 800 5 600 2 100 Carrying Value Depreciation Expense 1 400 Reducing Balance Accumulated Depreciation 1 400 4 200 5 880 2019 2020 2021 2 800 7 000 4 200 2 520 1 680 a. b. Explain the effect on the Income Statement if the Reducing Balance Method of depreciation is used in preference to the straight line method in 2020 1 mark Explain the effect on the Balance Sheet if the Reducing Balance Method of depreciation is used in preference to the straight line method in 2021. 2 marks Explain how owner should determine the appropriate method of depreciation for the Computer Equipment. Refer to alternative methods of depreciation in your answer. 4 marks c Step by Step Solution
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