Owl Company purchased a machine on 1 January 2019 for $720,000. The useful life of the machine was estimated to be 4 years with a residual value of $30,000. It was also estimated that the machine would produce 230,000 units of output over its 4-year useful life. The yearend of Owl Company is 31 December. Required: (a) Assume the company uses the straight-line method, compute the depreciation expense for the machine for the year ended 31 December 2019. (2 marks) (b) Assume the company uses the double-declining-balance method, compute the accumulated depreciation for the machine as at 31 December 2020. (2 marks) (c) Assume the company uses the units-of-production method, compute the carrying amount (net book value) of the machine on 31 December 2020. The machine produced 42,000 units of output in the year 2019 and 58,000 units of output in the year 2020. (2 marks) (d) Assume Owl Company uses the straight-line method to depreciate the machine. The machine was sold for $350,000 cash on 31 March 2021, prepare the journal entries to record: (i) the depreciation expense for the machine for the year 2021 up to the date of disposal on 31 March 2021. (2 marks) (ii) the disposal of the machine on 31 March 2021. (4 marks)

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a To compute the depreciation expense for the machine for the year ended 31 December 2019 using the straightline method we need to divide the depreciable cost cost residual value by the useful life De... View the full answer