Question

Max purchased a labeling machine on the of Aune 2017. The machine cost $200 000 which was paid for by a loan of $150,000 and cash of $50,000. The machine will be used for 8 years and it is expected that Max Corporation will receive $8.000 cash for the scrap The machine is expected to produce labels the rate of Year ended March 2020 So 140.000 1501000 140 000 10201000 Max Corporation is registered for GST and as a balance date of 31 March Required: Showing your working for each question (a) 2018 Using straight line depreciation method calculate the depreciation for the year ended March (b) 2020 Using straight line depreciation method calculate the depreciation for the year ended March Ic) What is the unit of use for the machine? d) Using Unit of Use depreciation method ended March 2020 the expected depreciation for the year (a) If the machine made 95.000 labels in 2020 what is the actual deprecation that will be died for the younded March 20207 If the machine made 95.000 abil in 2020 what is the actual deprecation that will be claimed for the yewended March 20207 (9) Using Diminishing Value method where the deprecation is 15 Simes the straight-line value the deprecation rate will be th) Using Diminishing Value method where the deprecation is 15 times the straight-line value calculate the depreciation expers for years ended March 2018, 2019 and 2020 Period ended Cost Price Opening Value Depreciation for Closing balang March 2018 March 2019 March 2020

Answer 1

Straight line Depreciation method

(Cost - Salvage value) / Useful life

(200,000 - 8,000) / 8

$24,000

A) Depreciation for March 2018 $24,000

B) Depreciation for March 2020 $24,000

C) unit of use of machine is number of labels machine can produce

D) Depreciation using unit of use method

(cost - Salvage value) *. March 2020 units

Total number of units expected to

be produced by machine

(200,000 - 8000)/1,020,000 * 120,000

$22, 588

E) (200,000 - 8,000)/1,020,00 * 95,000

$17,882