Haitham Al Balushi is an organization manufacturing machine component. Due to the expansion in capacity the organization is planning to purchase a new machinery. The new machinery was purchased on the 1st of May 2019 at a purchase cost of OMR 120,000. The machine has an estimated useful life of 5 years and it is estimated total machine hours that could be operated is 60,000 hours. Once the useful life of the machine ends it is estimated residual value is OMR 20,000. The machine hours used in the year 2019 is 5000 hours and in the year 2020 is 12,000 hours. Required. Calculate the Depreciation Charge for the 2019 using each of the below Method. Activity Based Method Straight line Method Reducing Balance Method/ Written down Value Method
Haitham Al Balushi is an organization manufacturing machine component. Due to the expansion in capacity the organization is planning to purchase a new machinery. The new machinery was purchased on the 1st of May 2019 at a purchase cost of OMR 120,000. The machine has an estimated useful life of 5 years and it is estimated total machine hours that could be operated is 60,000 hours. Once the useful life of the machine ends it is estimated residual value is OMR 20,000. The machine hours used in the year 2019 is 5000 hours and in the year 2020 is 12,000 hours. Required. Calculate the Depreciation Charge for the 2019 using each of the below Method. Activity Based Method Straight line Method Reducing Balance Method/ Written down Value Method
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Haitham Al Balushi is an organization manufacturing machine component. Due to the expansion in capacity the organization is planning to purchase a new machinery. The new machinery was purchased on the 1st of May 2019 at a purchase cost of OMR 120,000. The machine has an estimated useful life of 5 years and it is estimated total machine hours that could be operated is 60,000 hours. Once the useful life of the machine ends it is estimated residual value is OMR 20,000. The machine hours used in the year 2019 is 5000 hours and in the year 2020 is 12,000 hours.
Required.
Calculate the
- Activity Based Method
Straight line Method Reducing Balance Method / Written down Value Method
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