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Question 2 (20 marks) Plum Corporation purchased a new machine on Jan 4, 2020 for $115,000 cash. The machine has a useful life of 12
Question 2 (20 marks) Plum Corporation purchased a new machine on Jan 4, 2020 for $115,000 cash. The machine has a useful life of 12 years or of 160,000 kilometres. After the useful life the machine will have a residual value of $2,000. The machine was used for 22,500 km in 2020 and 32,500 km in 2021. Required: a. Calculate the depreciation expense for 2020 and 2021 under each of the following methods: i. Straight-line (4 marks) ii. Double diminishing-balance (8 marks) b. Calculate the carrying amount at the end of 2021 for the machine when the company is using the double diminishing balance depreciation method. (5 marks) c. Record the journal entry for the depreciation expense for the year ended December 31, 2021 under the straight-line method
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