Exercise 2) Depreciation:The following data for a machinery is available:
Purchase price (incl. 20%VAT) 360 000 EUR
Salvage value (excl VAT) 10 000 EUR
useful life 7 years
(=estimated service life)
production capacity 580 000 hours
1st year: production (2006) 120 000 hours
2nd year: production (2007) 160 000 hours
3rd year: production (2008) 130 000 hours
4th year: production (2009) 80 000 hours
5th year: production (2010) 50 000 hours
6th year: production (2011) 40 000 hours
7th year: production (2012) 30 000 hours
a) Calculate the straight-line depreciation. (straight-line method)
b) Calculate the depreciation based on the activity method.
c) What other depreciation methods do you know?
d) Calculate the depreciation for 2006 and the book value (31.12.2006) in accordance with the Austrian (taxation) regulations (straight-line) if the machinery has been purchased at 30 May 2006.
e) Calculate the depreciation for 2006 and the book value (31.12.2006) in accordance with the Austrian (taxation) regulations (straight line) if the machinery has been purchased at 5 August 2006.