Question 1 (10 marks )

Answer the questions to each of the following independent parts.

Part A. On January 2, 2019, a machine was purchased for $ 200,000. It has an estimated useful life of ten years and an estimated residual value of $14,000. The company uses the declining-balance method of depreciation with a declining balance rate of 30%.

Depreciation expense for 2019 = $________________________.

Depreciation expense for 2020 = $_________________________.

Part B. .A vehicle purchased for $50,000 has an estimated useful life of five years and a residual value of $4,000. It is expected to be driven 200,000 kilometers over its useful life. The asset was driven 60,000 kilometers in the first year and 40,000 kilometers in the second year. The company uses the units of production method,

Depreciation for the second year = $_____________________________.

Part C. A machine costing $72,000, with an estimated useful life of five years and a residual value of $12,000, is depreciated by the straight-line method. This asset is sold for $45,000 at the end of the second year of use.

Annual Depreciation expense $__________________________

The gain or loss on the disposal is $___________________________