Umbilo Ice Cream and ABF Enterprises
Question 1 Umbilo Ice Cream purchased a freezer at a cost of R 285000.The estimated life of the freezer is 5 years. At which time they will have no salvage value? The company would like to compare allowable depreciation methods and decide to prepare depreciation method schedules for the fixtures using the strait-line-double declining-balance and sum-of the year digit method of depreciation schedules. Find the answers to these questions for Umbilo Ice Cream. 4.1 What is the book value at the end of the third year using the straight line depreciation method? 4.2 Using the double-declining-balance method of depreciation, what is the book value at the end of the third year? 4.3 With the…
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