Nevertire Ltd purchased a delivery van costing $52 000 net of GST. It is expected to have a residual value of $12 000 at the end of its useful life of 4 years or 200 000 kilometres.

Required

A.    Assume the van was purchased on 2 July 2015 and that the accounting period ends on 30 June. Calculate the depreciation expense for the year 2015–16 using each of the following depreciation methods:

    1.    Straight-line

    2.    Units of production (assume the van was driven 78 000 kilometres during the financial year).

    3.    diminishing balance

B.    Assume the van was purchased on 1 October 2015 and that the accounting period ends on 30 June. Calculate the depreciation expense for the year 2015–16 using each of the following depreciation methods:

    1.    Straight-line

    2.    Diminishing balance

    3.    Units of production (assume the van was driven 60000 kilometres during the financial year).