Tigon Limited bought a Delivery Van on 1 July 2015 for $85,000 (excluding GST). The depreciation on the van is calculated using the diminishing balance (DB) method at an annual depreciation rate of 36%.

Tigon Limited also bought a Truck on 1 July 2015 for $75,000 (excluding GST), with an estimated residual value of $15,000 and a useful life of 10 years. Hint: Is residual value utilised in the diminishing value method or the straight-line method?

Required:

1. Using the Depreciation Assessment template provided, calculate the depreciation deductions that Tigon Limited will be able to claim for the 2016 and 2017 income years for both the Delivery Van and the Truck, and determine the closing book value of the assets in each year. Please use the appropriate depreciation method(s) based on the information provided. 

2. Prepare the journal entries to record the depreciation expense for the 2016 and 2017 years.