Wayne operates a candy factory in Seremban. The machines in his factory are purchased overseas. On 1 Jan 2015, he purchased a machine from Japan costing RM120,000. The machine was delivered to Malaysia on freight. The transportation cost of RM3,000 and freight insurance of RM1,200 was borne by Wayne. When the machine landed in Malaysia, Wayne paid custom duty of RM3,000. Wayne hired an engineer to install the machine within the factory. The engineer told Wayne that in the event Wayne wishes to dismantle the machine in the future, it would cost him RM700. After the installation was completed, the engineer billed him at RM1000. Wayne plans to use the machine for 6 years. Every year, the machine would be maintained at a cost of RM350. At the end of year 6, the machine will be dismantled and sold off as scrap for RM5,000. For every of his assets, Wayne adopts the policy to make full year depreciation in the year of purchase and no depreciation in the year of disposal.

required: a) Compute the annual depreciation for the years ended 31 Dec 2015, 2016, 2017, 2018 and 2019 using the following depreciation basis: (i) straight line (ii) reducing balance basis at the rate of 42% per annum.

b)With your answer in (a) (ii) above, prepare for the years ended 31 Dec 2017, 2018 and 2019: (i) Machinery account (ii) Depreciation account (iii) Accumulated depreciation account (iv) Statement of Profit or Loss (extract) (v) Statement of Financial Position (extract)