On January 1, 2020, Swifty SA purchased the following two machines for use in its production process.

Machine A:

The cash price of this machine was R$43,000. Related expenditures included: sales tax R$3,850, shipping costs R$100, insurance during shipping R$120, installation and testing costs R$80, and R$150 of oil and lubricants to be used with the machinery during its first year of operations. Swifty estimates that the useful life of the machine is 5 years with a R$5,550 residual value remaining at the end of that time period. Assume that the straight-line method of depreciation is used.

Machine B:

The recorded cost of this machine was R$81,600. Swifty estimates that the useful life of the machine is 4 years with a R$4,600 residual value remaining at the end of that time period

Prepare the following for Machine A.

1.	The journal entry to record its purchase on January 1, 2020.
2.	The journal entry to record annual depreciation at December 31, 2020

Calculate the amount of depreciation expense that Swifty should record for Machine B each year of its useful life under the following assumptions.

(1)	Swifty uses the straight-line method of depreciation.
(2)	Swifty uses the declining-balance method. The rate used is twice the straight-line rate.
(3)	Swifty uses the units-of-activity method and estimates that the useful life of the machine is 135,000 units. Actual usage is as follows: 2020, 55,000 units; 2021, 36,500 units; 2022, 27,000 units; 2023, 16,500 units.

Which method used to calculate depreciation on Machine B reports the highest amount of depreciation expense.

In Year 1 (2020)

In Year 4 (2023)

Over the 4-year period