LFS00AC1 Foundation Studies: Accounting 1 - Assessment Test 4

Question 3 (17 marks)

Eddy’s Electrical Repairs purchased new equipment at a cost of $75,000 for the business on 1 May 2019. He expects that it will have a life of 5 years at which time he will be able to sell it for $15,000.

Required

1. Calculate the annual depreciation expense
2. Calculate the annual depreciation rate
3. Calculate the depreciation expense to year end 30 June 2019
4. Complete the Balance Sheet extract for year end 30 June 2019
5. Complete the Balance Sheet extract for year end 30 June 2020

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