Phillips Ltd$.$ purchased a machine on $26$ March $20$X$3$ for $$118,000$ and began to use it immediately. The estimated useful life of the machine is $5$ years, and it has an expected residual value of $$11,100$ at that time. Phillips uses straight$-$line depreciation.

Required:

$1$ & $2.$ Calculate annual depreciation for $20$X$3$ through $20$X$8$ assuming that depreciation is calculated to the nearest month using three accounting conventions:

Half$-$year convention

Full$-$first$-$year convention

Final$-$year convention

$3.$ Calculate the gain or loss on disposal assuming that the asset is unexpectedly sold for $$7,000$ at the end of $20$X$6,$ using net book value from requirement $1,$ and then from the three alternatives in requirement $2.$