Cutting Edge Ltd purchased a state of the art hedge trimming tractor for a contract to maintain country roadside hedges for a local council.The manufacturer of the tractor stated in marketing material that the tractor is able to trim 700 000 kilometres of hedges in its operating life.Cutting Edge believes that the particularly woody type of hedges they have been contracted to maintain means that the life of the tractor is likely to be 15 per cent less than the manufacturer specified.The tractor cost $100 000 and is expected to have a salvage value at the end of its useful life of $30 000.The tractor trimmed 60 000 kilometres this period.What is the depreciation charge this period (rounded to the nearest dollar) ?
A) $7,059
B) $6,000
C) $10,084
D) $9,524
E) None of the given answers.
Correct Answer:
Verified
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