Question
In: Accounting
A machine costing Rm 100,000 has a life expentancy of five years and a salvage value Rm 20,000
A machine costing Rm 100,000 has a life expentancy of five years and a salvage value Rm 20,000. Calculate: a) accumulated depreciation b) book value at the end of three years using the straight line method
Solutions
Expert Solution
a. Accumulated depreciation at the end of three years = Annual Depreciation x 3 years
= Rm 16,000 x 3 years
= Rm 38,000
b. Book value at the end of three years = Cost of machine - Accumulated depreciation
= Rm 100,000 - Rm 38,000
= Rm 62,000
Working:
Annual Depreciation (straight line method) = (Cost of the assets - Residual value) / Expected life of the assets
= (Rm 100,000 - Rm 20,000) / 5 years
= Rm 16,000
DEEPIKA GOYAL answered 2 years agoRelated Solutions
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