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KLM Ltd purchased new equipment on 1st January 2010, at a cost of $420 000 net of GST. The company estimated that the equipment had
KLM Ltd purchased new equipment on 1st January 2010, at a cost of $420 000 net of GST. The company estimated that the equipment had a useful life of 5 years and a residual value of $45 000. Required Assuming a financial year ending 30th June, calculate the amount of depreciation expense for each year ending 30th June 2010 through to 30th June 2015, with each of the following methods: (a) straight line 2 marks (b) sum-of-years-digits 4 marks (c) diminishing balance using the formula 1-(r/c)1/n 4 marks 1- 5 420 000 45 000 = 1 - .64 = 36%
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