Ostrade recognised a right-of-use asset for a forklift truck at a cost of 240,000. The lease term is 4 years and the useful life of the forklift is 6 years. The lease does not transfer ownership and contains no purchase option. Ostrade uses the straight-line method (method chosen by the entity). Compute the annual depreciation charge and the carrying amount of the right-of-use asset at the end of the first year.
- Cost of the right-of-use asset
- 240,000
- Lease term
- 4
- Useful life of the forklift
- 6