Al Hajar Electronics LLC Asset Acquisition and Depreciation

On st April Al Hajar Electronics LLC a company based in Oman specializing in retailing highquality electronic goods, acquires a new refrigeration system for its main warehouse from CoolTech Solutions. The financial and operational details of the purchase are as follows:

OMR:

List price of the refrigeration system:

Import duty:

Delivery fees:

Installation costs:

Preproduction testing:

Purchase of a fouryear service agreement with CoolTech Solutions:

Additionally, Al Hajar Electronics LLC was granted a trade discount of on the initial list price of the refrigeration system and a settlement discount of if payment was made within days of purchase. The payment for the refrigeration system was completed on th April

The refrigeration system is estimated to have a useful life of years with a potential salvage value of OMR at the end of its use. The estimated usage is cooling hours over its lifetime.

In the year Al Hajar Electronics LLC uses the refrigeration system for hours. Calculate Depreciation Charges for Al Hajar Electronics LLC for and answer related questions Marks Total mark for each

Using the straightline method

Applying the activity method based on cooling hours for

Implementing the sumoftheyears\' digits method for

Calculating using the diminishing written down value method for

Which Depreciation method provides the highest deduction in the final year of an asset\'s life?

Which depreciation method produces a constant periodic expense as an asset depreciates?

What is the difference between Depreciation for financial reporting purposes and tax purposes?

Which method provides a larger Depreciation deduction under an acceleratedcost recovery system?

Answer rating: 100% (QA)

1 Straightline method Depreciation expense Cost Salvage value Useful life 62000 6250 8 734375 OMR 2 Activity method based on cooling hours Depreciatio... View the full answer