MAT112 (Assignment) NAME:_______________________________________

Business Mathematics GROUP:______________________________________

September 2019 – January 2019 STUDENT ID:__________________________________

a) Explain in your own words the meaning of depreciation with an example.

b) State the difference and/or the similarities between the straight line method and the declining balance
method. You can tabulate the answer if necessary.

c) Answer the following questions. Show all your workings clearly.

1. NS Company bought an excavator for RM72,000. The useful life of the excavator is 8 years. If the book value
of the excavator at the end of 4 years is RM42,000, find its scrap value at the end of 8 years using the
straight line method.

2. Rajoo bought a lorry at RM250,000. It is estimated to last for 10 years and with the scrap value of
RM165,000. Find the book value of the lorry after 5 years by using the declining balance method.

3. A car costing RM98,000 depreciates at a rate of r%. its scrap value at the end of 7 years is RM20,000. Using
the declining balance method, find r and the accumulated depreciation at the end of 6 years.

4. The book value for an asset at the end of the second year and the third year were RM16,000 and RM12,000
respectively. Using the declining balance method, calculate the rate of depreciation.

5. A vehicle that cost RM70,000 has a life span of five years. If the salvage value is RM45,000, find the book
value of this vehicle at the end of the third year using the straight line method.

6. Carlo Bakery bought an oven at the cost of RM11,122.40. It is estimated to last for eight years and has a
salvage value of RM4,000. Calculate the book value of the oven after four years using the declining balance
method.

7. The cost of a new machine is RM600,000. It is estimated to have a useful life of 15 years with a scrap value of
RM10,000. Calculate the book value at the end of seven years using the straight line method.

8. A new car is priced at RM125,000. The life expectancy of the car is 15 years and the scrap value is RM25,000.
Find the depreciation rate using the declining balance method.

9. A Xerox machine was purchased for RM55,000. It has an estimated useful life of 10 years with a scrap value
of RM15,000. Compute the depreciation for the fifth year using the straight line method.

10. Radin bought a car that cost RM120,000. The useful life of the car is eight years. If the salvage value of the
car is RM50,000, find the book value of the car after four years using the declining balance method.

11. Sunny Company buys a bus at RM150,000. The useful life of the bus is ten years. If the book value at the end
of five years is RM90,000, find the scrap value of the bus at the end of ten years using the straight line
method.

12. A factory purchased a new machine for RM120,000. The machine has an expected life of five years. If the
scrap value of the machine is RM15,000, calculate the book value after 6 years using the declining balance
method.

13. A company bought a lorry at RM72,000. The useful life of the lorry is 8 years. If the book value at the end of
4 years is RM42,000, find the scrap value of the lorry at the end of 8 years using the straight line method.

14. Find the book value at the end of 3 years for a machine which cost RM30,000. Use declining balance method
with an annual rate of 26%.
15. Delicious Bakery bought a microwave oven at RM17,000. It is estimated to last for 7 years and has a salvage
value of RM3,000.
i) Find the book value of that oven after 3 years by using the straight line method.
ii) Find the annual rate of depreciation by using the declining balance method.

16. A plasma television costs RM5,888 and has expectancy life of 7 years. After 3 years of usage, the total
depreciation of the television using the declining balance method was RM1,595.65.
i) Find the rate of the depreciation.
ii) Find the scrap value of the television.

17. The cost of new HiFi is RM3,850. Its estimated useful life is 5 years with a scrap value of RM650. Find
i) The accumulated depreciation for 3 years using the straight line method.
ii) The annual rate of depreciation using declining balance method.

18. A machine has a scrap value of RM12,000 at the end of 8 years and the book value of RM14,000 at the end
of 6 years. Using the straight line method, find the cost of the machine.

19. The cost of a grass cutter is RM8,000 and its salvage value at the end of 7 years is estimated to be RM1,700.
Calculate the accumulated depreciation and the book value of the cutter at the end of the fourth year using
the straight line method.

20. A Dutch petroleum company purchased a barge for RM1,300,000. The estimate life is 20 years, at which it
will have a salvage value of RM200,000.
i) Use the straight line method of depreciation to find the annual amount of depreciation.
ii) Find the book value at the end of 5 years.

21. Compu-Tech Purchased new warehouse shelving for RM37,500. The estimated life is 10 years, with a salvage
value of RM7,500. Use the straight line method of depreciation to find:
i) The annual rate of depreciation.
ii) The annual amount of depreciation.
iii) The book value at the end of 5 years.
iv) The accumulated depreciation at the end of 8 years.

22. Amran bought a new car for RM43,500. He uses the declining balance method for computing depreciation. If
he uses an annual depreciation rate of 16%, calculate the accumulated depreciation of the car at the end of
four years.

23. Tong Wat Company purchases a new machine for RM98,000. The machine has an expected life of sixteen
years. If the scrap value of the machine is RM14,000, calculate the book value after six years using the
declining balance method.

24. Kamal wants to sell a jeep which has been used for eight years. The vehicle costed him RM62,000 when it
was purchased brand new. The jeep is estimated to have a scrap value of RM8,000 after 15 years. Construct
the depreciation schedule for the first eight years using the declining balance method.

25. Izany Bakery buys an oven at RM28,000. It is estimated to last for eight years and has a salvage value of
RM2,000.
i) Find the book value of the oven after four years using the straight line method.
ii) Find the annual rate of depreciation using the declining balance method.

“You can copy all you want, you will always be one step behind.”
“I would prefer even to fail with honor than win by cheating”
“I hear and I forget. I see and I remember. I do and I understand.”
“You were born an original, don’t die a copy”
“It does not matter how slowly you go as long as you do not stop”