January 2022 Depreciation Adjustments at Month End (January 31) Adjustment 2: Depreciation of Stringing Machines As at 31 January 2022, Ash & John had three stringing machines. Details of these assets are presented in Exhibit 1 below. Exhibit 1 Machine 1 Machine 2 Machine 3 Date of acquisition 1 July 1 January 1 January 2020 2020 2022 Useful life in years 3 6 4 Cost $11,400 $15,600 $2,400 Residual value $600 $1,200 $0 Expected total 21,600 24,000 9,600 production* Production in 150 255 0 January 2022** *Total number of stringing services expected to be performed between the date of acquisition and the end of useful life. **Total number of stringing services performed in the month. Demand for stringing services has declined significantly over the last 2 years and the stringing machines have not been used much and Ash & John are considering between the following: Option (1): continuing to use the straight-line depreciation method for the stringing machines (current practice).