Business, 18.06.2020 12:57 vkrizh

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

a) Assume the van was purchased on 1 July 2019 and that the accounting period ends on 30 June. Calculate the depreciation expense for the year 2019–20 using each of the following depreciation methods

 straight-line.

 diminishing balance (depreciation rate has been calculated as 31%).

 units of production (assume the van was driven 78,000 kilometers during the financial year).

b) Record the adjusting entries for the depreciation on 30 June 2021 using a diminishing balance method.

c) Show how the van would appear in the balance sheet prepared at the end of year 2 using the Straightline method.

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Nevertire Ltd purchased a delivery van costing $52,000. It is expected to have a residual value of $...