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5 Depreciation methods L02 Port Kembla Steel purchases a machine on 1 July for $30 000. The machine has an estimated useful life of seven years, during which time it is expected to produce 114 800 units. Residual value is estimated at $1300. The machine produces 15 500 and 16 200 units in its rst and second nancial years of operation, respectively. Required Calculate depreciation expense for the machine's rst two years using the straight-line, reducing-balance (double straight-line rate) and units-of-activity methods of depreciation