Depreciation calculations and selection of method Wagtail Limited purchased a t-shirt printing machine for its factory on 1 July 2018 at a cost of $812 500. It was estimated the machine will have a useful life of four years and a salvage value at the end of that period of $32 500.

1 Calculate the depreciation expense that would be charged with respect to this equipment in each of the years ending 30 June 2019, 2020, 2021 and 2022 using the:

a straight-line method b reducing balance method (use 40 per cent rate).

2 Outline the main factors to be considered in selecting an appropriate depreciation method for this t-shirt printing machine.