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E.3 Medicare Pharma Company purchased a face mask manufacturing machine on 1st January 2018, at a cost of OMR 25000, and installation and annual maintenance
E.3 Medicare Pharma Company purchased a face mask manufacturing machine on 1st January 2018, at a cost of OMR 25000, and installation and annual maintenance contract cost OMR 3000. The machine has an estimated life of 4 years and residual value of OMR 4000. Instructions: (a) Calculate annual rate of depreciation, annual amount of depreciation and book value at the end of every years using straight-line depreciation method. [4 Marks] (b) Prepare depreciation schedule for 4 years using the written down value method. [3 Marks] (c) Calculate the book value using written down value method at end of 2 years, if depreciation charged at rate of 30% per annum. [1 Mark ] (d) What would be the difference in the depreciation expense for the year ending 31st December 2019 based on using either the straight-line method or the Written down value method? [1 Mark] (e) On what basis should management select from these two matbodeta denomiota thambino
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