A company purchases a piece of plant for $945000 with an expected life of 4 years,...

 

Transcribed Image Text:

A company purchases a piece of plant for $945000 with an expected life of 4 years, when it expects to be able to sell it for $102900. The cost of capital for this company is 16%. Determine the depreciation to be charged each year using each method in the table below. Answers should be correct to 2 decimal places. Note: the question is asking for the amount of depreciation for each year. This is the amount that should be used as an expense for that year. This means that the total sum for each column should be the same. Year Straight Line Diminishing Value Sinking Fund 1 2 3 4 Sum of Digits A company purchases a piece of plant for $945000 with an expected life of 4 years, when it expects to be able to sell it for $102900. The cost of capital for this company is 16%. Determine the depreciation to be charged each year using each method in the table below. Answers should be correct to 2 decimal places. Note: the question is asking for the amount of depreciation for each year. This is the amount that should be used as an expense for that year. This means that the total sum for each column should be the same. Year Straight Line Diminishing Value Sinking Fund 1 2 3 4 Sum of Digits

Answer rating: 100% (QA)

A Company Workings for Straight Line Amount Note Cost of machinery 94500000 Less Salvage value 10290... View the full answer