Pentec Ltd Has Just Acquired 5 New Computers for $29,000

question 61

Short Answer

Pentec Ltd has just acquired 5 new computers for $29,000 in total and paid a further $1,000 to have additional zip drives added.The computers are expected to have a useful life of 5 years and its salvage value is expected to be $3,000.Pentec Ltd has decided to apply the declining balance method of calculating depreciation.What is the first 2 years depreciation charge on the computers?

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Definitions:

Internal Control

Processes and procedures implemented by a company to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.

Cost Of Goods Sold

An expense measured as the direct costs attributable to the production of the goods sold by a company, including material and labor costs.

Work In Process Inventory

Items that are currently under production but have not yet reached completion.

Predetermined Overhead Rate

A rate calculated before a period begins, used to allocate indirect costs to products or services based on a chosen activity base such as labor hours or machine hours.