B 1 Question 1: Capital Assets (20 marks) 2 On April 1, 2020, Evergreen purchased a tree grinding machine for $160,000. The machine was estimated to have a five year 3 useful life and an $8,000 residual value. The company has a December 31st year end. 4 5 It was also estimated to have a total useful life of 12,000 hours. It is used for 1,600 hours in the year ended December 31, 2020, 3,000 hours in the year ended December 31, 2021, 2,900 hours in the year ended December 31, 2022,2,000 hours in 7 the year ended December 31, 2023, 2,000 hours in the year ended 2024 and 500 in the year ended 2025. 8 9 (1) How much depreciation expense should Evergreen record in each of 2020 to 2025 under each depreciation method: (a) straight-line, (b)units of production, and (c) double diminishing cost? 10 11 Units of Double Diminishing Balance Straight Line Production 12 Year Method Method Carrying Amount Depreciation Expense (round rate to 3 2 decimal) 2020 15 2021 16 022 17 2023 18 2024 19 2025 0 1 2 (2) What is the accumulated depreciation under each method for the year ended December 31, 2021? 3 4 Units of Double Straight Line Production Diminishing 5 Year Method Method Balance 6 2021 7