Minimart Express Ltd purchased a new refrigerated delivery van for its home delivery service. The van cost
Question:
Minimart Express Ltd purchased a new refrigerated delivery van for its home delivery service. The van cost \($100\) 000. Minimart Express was also required to pay an additional \($3500\) for stamp duty and registration and a further \($20\) 000 was paid for internal shelving. The delivery van is expected to have a residual value of \($25\) 000 at the end of its useful life of 5 years or 450 000 kilometres. Ignore GST.
Required
(a) Assume the van was purchased on 2 July 2024 and that the accounting period ends on 30 June. Calculate the depreciation expense for the year 2024–25 using each of the following depreciation methods:
i. straight-line ii. diminishing balance iii. units of production (assume the van was driven 95 000 kilometres during the financial year).
(b) Assume the van was purchased on 1 November 2024 and that the accounting period ends on 30 June. Calculate the depreciation expense for the year 2024–25 using each of the following depreciation methods:
i. straight-line ii. diminishing balance iii. units of production (assume the van was driven 55 000 kilometres during the financial year).
Step by Step Answer:
Accounting
ISBN: 9780730382737
11th Edition
Authors: John Hoggett, John Medlin, Keryn Chalmers, Claire Beattie