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QUESTION 1 An equipment was acquired at a cost of RM300,000. Its estimated useful life is...

QUESTION 1

An equipment was acquired at a cost of RM300,000. Its estimated useful life is five years. It is expected that the salvage value for the equipment is RM50,000. Using the sum of year digit method, calculate and prepare the depreciation expenses and schedule for the five years.

Solutions

Expert Solution

Since the useful life is 5 years, denominator = 5+4+3+2+1 = 15

Year Depreciation Base Remaining Life of Equipment Depreciation Fraction Depreciation Book Value
RM RM RM
1                                250,000 5 5/15                      83,333.33                    216,667
2                                250,000 4 4/15                      66,666.67                    150,000
3                                250,000 3 3/15                      50,000.00                    100,000
4                                250,000 2 2/15                      33,333.33                       66,667
5                                250,000 1 1/15                      16,666.67                       50,000

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