1. Tasmanian Printers and Bookbinders Pty Ltd commenced business on 1 July 2023. On 5 July 2023 it spent $150 000 on industrial printing and binding machinery, payable in two equal instalments on 1 August and 1 November 2023. They incurred $4 500 in transport costs to deliver the machinery to the business premises and a further $5 000 in electrical wiring and installation before the machinery could be used for production. These expenses were paid in cash. The supplier informed management the machinery has a productive capacity of 600 000 hours. It is estimated the residual value would be $10 000 in scrap metal at the end of the machinery's useful life.

On 30 August 2023, the business purchased a second-hand truck for $35000 for deliveries. Stamp duty amounted to $1 050. Four new tyres were fitted at a cost of $1 200 to meet roadworthy conditions. The truck was expected to have a useful life of 5 years and a residual value of $5 000.

The company has adopted the units of production method of depreciation for the printing and binding machinery and the diminishing balance method for the truck. The end of its reporting period is 30 June. Ignore GST.

Required

1. Calculate the depreciation expense for the financial years 2023-24 and 2024-25 for printing and binding machinery using:

• units of production (assuming the production totalled 74 000 hours in 2023-24 financial year and 70 000 hours in 2024-25 financial year).

[4 marks]

Financial year 2023-24

FOR STUDENTS TO FILL

Financial year 2024-25

FOR STUDENTS TO FILL

1. Calculate the depreciation expense for the financial years 2023-24 and 2024-25 for truck using:

• diminishing or reducing balance (assuming diminishing balance rate to be 33%)

[4 marks]

Financial year 2023-24

FOR STUDENTS TO FILL

Financial year 2024-25

FOR STUDENTS TO FILL