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O’Reilly Pty Ltd purchased a motor vehicle for use in the business on 31 March this year for $42,000 plus GST. In accordance with the firm’s policies and procedures, the accountant believes the cost of the motor vehicle should be allocated equally over its expected useful life of 5 years. It is anticipated that the motor vehicle would have a residual value of $10,000 plus GST. Assuming the balance date is 30 June. To be consistent with the depreciation method suggested by the accountant, would the preferred method of depreciation be straight-line depreciation, diminishing balance method or units of production method?
Sagot :
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