Question
Wollongong Constructions Ltd purchased new building equipment on 1 January 2022, at a cost of $442,500. The accountant estimated the building equipment would have a
Wollongong Constructions Ltd purchased new building equipment on 1 January 2022, at a cost of $442,500. The accountant estimated the building equipment would have a useful life of 5 years and a residual value of $25,000.
Required
a) Calculate the amount of depreciation expense for the years ending 30 June 2022 and 30 June 2023, using the following methods:
- Straight-line.
- Diminishing balance.
b) Discuss how the units of production method for depreciation differs from the straight line and diminishing balance methods.
Wollongong Constructions Ltd purchased new building equipment on 1 January 2022, at a cost of $442,500. The accountant estimated the building equipment would have a useful life of 5 years and a residual value of $25,000.
Required
a) Calculate the amount of depreciation expense for the years ending 30 June 2022 and 30 June 2023, using the following methods:
- Straight-line.
- Diminishing balance.
b) Discuss how the units of production method for depreciation differs from the straight line and diminishing balance methods.
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Auditing Today
Authors: Emile Woolf
3rd Edition
013052168X, 9780130521682
