n

Question 6 (22 marks} Production Inc, has a year end date of June 30 and produces small electronic music parts. The company records depreciation to the nearest whole month in the year a capital assets is purchased. On March 20. 2016, they purchased and put into use a new production machine by spending the following amounts: Invoice price of the machinery [purchase terms mo. n30] - paid March 25 $190,000 Freight to have the machinery delivered to Production's facility 5,000 Duty upon shipment of the machinery to Production's facility 4.900 Damage as a result of an employee dropping his Starbuck's latte into the motor of the new machinery 3,000 Cost of mounting the machinery on a permanent platform in the warehouse 2,000 The management of Production Inc. has made the following assumptions: Years the machine is expected to be used in the business 5 years Number of products the machinery is expected to produce 1.000.000 Expected salvage vaiue at the end of 5 years 550.000 REQUIRED: Compute depreciation under each of the following three methods for the rst 5 year ends of Production inc following the purchase of the machine. Assume for the units afoutputmethodthat the number of products produced in each of the following business years are as follows: 2016 80,000 units 2017 250.000 units 2018 245,000 units 2019 205,000 units 2020 225.000 units 2017 2018 _ Method - Double Net Book Value, Depreciation Accumulated Net Book Value, Declining Balance Beginnlng of year Expense Depreciation End of year _ 2018 _ Method - Straight Line Depreciation expense Ace. Depreciation Net Book Value. End _ 2019