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On 1 May 20x3, Easy Jet Company ('EJC') paid $18,178,800 for a warehouse. EJC estimated that the warehouse could be used for six years and
On 1 May 20x3, Easy Jet Company ('EJC') paid $18,178,800 for a warehouse. EJC estimated that the warehouse could be used for six years and will have a salvage value of $501,000. In trying to decide which depreciation method to use for the warehouse, EJC's management requested a depreciation schedule of the straight-line and doubledeclining-balance depreciation methods. The fiscal year-end of EJC is 31 December. Required: 1 Prepare a depreciation schedule for the warehouse using the straight-line method showing depreciation expense, accumulated depreciation, and asset book value. (10 marks) 2 Prepare a depreciation schedule for the warehouse using the doubledeclining-balance method showing the calculation of depreciation expense, accumulated depreciation, and asset book value. Round your numbers to the nearest integer. (11 marks) 3 Explain why the units-of-production method is not suitable for recording the depreciation of the warehouse. (4 marks)
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