Mac Machines purchased machinery on 1 January 2018 at a cost of R70 000 . The machinery has an expected useful life of ten years with a residual value of R2 000. The financial year-end of Mac Machines is at 31 December every year. REQUIRED: Calculate the depreciation on machinery for 2018 and 2019 if the business uses the following depreciation methods: (a) The straight line method. (b) The diminishing balance method at 20%. NOTE: Show your workings clearly. Work to the nearest R1. EXERCISE 3.2 3.2 Africa Chips is a company that makes and sells potato chips. The financial year-end is 31 August 2019 . The company recorded the following transactions for a chip fryer: - Bought a chip fryer invoiced at R1 350000 on 1 May 2018 and took delivery of it on this date. - The company had to pay: - Transport costs of R10 000 for the delivery of the fryer from Johannesburg to the factory in Port Elizabeth. The transport service was provided on 1 May 2018 but the transport company was only paid on 31 December 2018. - The fryer had to be lubricated with special oil before it could be used. This oil cost R5 000. - The cost of the oil for frying chips was R500. - The fryer is expected to produce chips for a period of 5 years. REQUIRED: (a) Calculate the cost of the fryer. (b) Assuming the company uses the straight line method, calculate the depreciation expense for the chip fryer for the years ended 31 August 2018 and 31 August 2019. (c) Assuming the company uses the reducing balance method at 20% p.a., calculate the depreciation expense for the chip fryer for the year ended 31 August 2019. NOTE: Show your working clearly. Work to the nearest R1. Beginning inventory, purchases, and sales data for Commodity Y for June are presented below: REQUIRED: (a) Assuming that the perpetual inventory system is used, costing by the moving average method, determine the cost of the inventory balance at 30 June. Show clear workings. Work to the nearest cent. (b) Assuming that the periodic inventory system is used, costing by the weighted average method, determine the cost of the 15 units in the physical inventory at 30 June. Work to the nearest cent. (c) Determine the amount of the difference between the inventory cost in (a) and (b), and explain the reason for the difference