In calculating the profit before depreciation, all expenses have been deducted, including the repairs and maintenance expense. Required A. As the accountant for Admirable Ltd, prepare separate depreciation schedules for the machinery for the 5-year period, using the following depreciation methods: (a) straight-line, (b) diminishing• balance, (c) sum-of-years-digits, and (d) units-of-production. Use the following headings for each schedule: 'Year ending 30 June', 'Annual 2
depreciation expense', 'Accumulated depreci• ation', 'Carrying amount at end of year'. B. Prepare a report for management, stating the advantages and disadvantages of each depreciation method. Include in the report your recommendations on the choice of method consistent with the requirements of IAS 16/AASB 116. Support your recommendations with schedules show• ing the total annual cost of operating the machinery, and the profit after depreciation.