On October 1, 2021 Stan Auto Rentals purchases a new automobile for $ 30,000 to add to its fleet of rental cars.

The automobiles are rented out on a short-term basis with rental fees calculated based on distance driven by the customer.

Welchs policy is to sell and replace a car after the earlier of 3 years, or 75,000 kilometres.

The average selling price of the used cars is $ 8,000.

This particular car was driven 8,000 km in 2021, 39,000 km in 2022 and 21,000 km in 2023.

Required:

a) Calculate 2021 and 2022 depreciation expense under each of the following methods:

(i) Straight-line

(ii) Diminishing-balance using a 40% rate

(iii) Units-of-production

b) Which method will best match the estimated pattern in which the assets

economic benefits are expected to be consumed? Explain.