In the beginning of 2001 Deprecia Inc. purchased new machinery. The purchasing price was 1000 out of which Deprecia Inc. paid only 600, the remaining 400 will be paid in a years time machinery cost. Deprecia Inc. paid additional 120 for transporting the machinery to their plant, 180 for the installation, 50 for general employee training and 150 for the first batch of raw materials. Deprecia Inc. expects to pay 80 for annual maintenance and 40 for disposing of the asset in the end. The machine will be depreciated linearly over 5 years and Deprecia Inc. expects to sell it for 340 afterwards.

Q.1

a) What will be the depreciation expense in 2001?

b) What will be the depreciation expense in 2005?

c) What will be the value of the accumulated depreciation account on the balance sheet at the end of 2005?

d) What will be the net book value of the machine at the end of 2002?

e) What will be the net book value of the machine at the end of 2005?