Current liabilities

1. Prabhjoth want to start a pizza business and buys an oven for $50,000, with a useful life of 5 years. (a) Using a straight line method calculate the depreciation ( 2 marks) (b) Discuss the benefits and shortcomings of the straight line method of depreciation ( 2 marks) (c) Demonstrate the journal entry postings for the equipment and depreciation ( 2 marks) 2. Singh is starting a landscaping business and buys a truck for $50,000 with a useful life of 5 years and a salvage value of $4000 (a) Calculate the depreciation using double declining balance method ( 2 marks) (b) Explain the advantages and disadvantages of using double declining balance method ( 2 marks)