Roland Limited acquired an item of plant with an expected useful life of 5 years. Expected total production output over this period was: Year 1, 40 000 units; Year 2, 40 000 units; Year 3, 32 000 units; Year 4, 28 000 units Year 5, 15 000 units. The plant cost $200 000 and associated installation costs amounted to $50 000 and residual value is $20 000. The amount of depreciation charged in the first year is:

Question

Quizplus · Accepted Answer

Depreciation = (Cost + Installation costs - Residual value) / Useful life= (200,000 + 50,000 - 20,000) / 5= 230,000 / 5= $46,000 per year

Roland Limited Acquired an Item of Plant with an Expected