A machine cost Kerry Company $28,000,000 on 1 January 2019. The estimated Residual Value at that time was $4,000,000. The expected useful life of the Equipment was 4 years. The firms accounting year-end is 31 December each year.

1.Using the Sum of the years' digits method, calculate the Depreciation Expense for 2019.

2. Using the Double Declining Balance method at a rate of 50% per annum, what will be  the Book Value of the Machine on 31 December 2020 on the Statement of Financial Position of Kerry Company ?

3. Suppose the Machine is sold for $6,500,000 Cash on 1 January 2022. Using the Double Declining Balance method at a rate of 50% per annum, what is the Gain or Loss on the Disposal of the Machine?

Answer rating: 100% (QA)

Using the Sum of the Years Digits method the depreciation for 2019 can be calculated as follows Firs... View the full answer