2. The Zohar Utility organization purchased, on 1st January 2015 , a machine producing recyclable...
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2. The Zohar Utility organization purchased, on 1st January 2015 , a machine producing recyclable plastic moulds. The machine cost OMR 32,000 and was estimated to have a five-year life with a residual value of OMR 2,000. The company plans on using one out of the two most important methods of deprecation which are straight line \& Written down value methods. The CEO wants to decide on which method based on a few calculations that he asks you to perform which are given below. Prepare the required calculations to help the CEO arrive at a final decision. Required (a) Prepare a table of depreciation and net book values over the five-years using straight-line depreciation. (b) Prepare a table of depreciation and net book value over the five years using reducing-balance depreciation. (c) Using the straight-line method of depreciation, show the effect of selling the asset at the end of Year 3 for a price of OMR 5,000. (d) Using the reducing balance method of depreciation, demonstrate the effect on disposing the asset at the end of Year 4 for OMR 25,400
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