EXERCISE 1.2 Icon Industries purchased a new machine for R180 000 on 1 January 20.1. It is estimated that the useful life of the machine will be three (3) years with no residual value. The financial year-end of the business is 31 December. It is estimated that the machine will produce 500 000 units during its useful life. Actual production figures were: 20.1 190 000 units 20.2 170 000 units 20.3 140 000 units REQUIRED a. Calculate the depreciation for each of the three (3) years, as well as the total depreciation to be written off over the life of the machine, according to each of the methods below. Show for each method the note for Property, plant and equipment for the three years. 1. Straight-line method 2. Production unit method 3. Fixed percentage on the reducing balance method at 30% per annum. 4. Sum of the year digits method (SYD)

EXERCISE 1.2 Icon Industries purchased a new machine for R180 000 on 1 January 20.1. It is estimated that the useful life of the machine will be three (3) years with no residual value. The financial year-end of the business is 31 December. It is estimated that the machine will produce 500 000 units during its useful life. Actual production figures were: 20.1 190 000 units 20.2 170 000 units 20.3 140 000 units REQUIRED a. Calculate the depreciation for each of the three (3) years, as well as the total depreciation to be written off over the life of the machine, according to each of the methods below. Show for each method the note for Property, plant and equipment for the three years. 1. Straight-line method 2. Production unit method 3. Fixed percentage on the reducing balance method at 30% per annum. 4. Sum of the year digits method (SYD)

Fundamentals of Financial Management, Concise Edition (MindTap Course List)

9th Edition

ISBN:9781305635937

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter12: Cash Flow Estimation And Risk Analysis

Section: Chapter Questions

Problem 10P: REPLACEMENT ANALYSIS The Dauten Toy Corporation currently uses an injection molding machine that was...

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