Tutorial 8
1. A machine costing RM 30,000 has a life expectancy of four years and zero salvage value.
Using the straight line method, calculate the annual depreciation.
2. A machine costing RM 30,000 has a useful life of 5 years and a salvage value of RM
10,000. Using the straight line method, find
a) annual depreciation
b) the book value at the end of three years.
3. A firm bought a lorry for RM 50,000. The lorry is expected to last four years and its
salvage value at the end of the four years is RM 30,000. Using the straight-line method,
calculate the book value of the lorry at the end of second year.
4. Construct a depreciation schedule using the straight-line method for a new truck that costs
RM 60,000 and has a salvage value of RM 10,000 at the end of five years.
5. A machine costing RM 30,000 has a life expectancy of four years and salvage value of
RM 10,000. Calculate the accumulated depreciation and the book value at the end of three
years using the declining balance method.
6. A machine costing RM 20,000 has a life expectancy of three years and salvage value of
RM 2,000. Using the declining balance method, calculate the annual rate of depreciation.
7. A local company calculates depreciation on its cars at an annual rate of 5% on a declining
balance method. Calculate the accumulated depreciation at the end of three years on a car
that costs RM 60,000.
8. A machine costing RM 50,000 has a life expectancy of five years and salvage value of
RM 10,000. Using the sum of year’s digits method, calculate the book value at the end of
two years.
Suggested Solution to Tutorial
1. Annual depreciation = RM 7,500
2. a) RM 4,000
b) RM 18,000
3. RM 40,000
4.
5. Accumulated depreciation = RM 16,841.11
Book value = RM 13,158.89
6. r = 53.58%
7. RM 8,557.50
8. Book value = RM 26,000
