Question 4 Golden Ltd invested in an advanced hydraulic press machine for $68,600 on 1 January 2019 and estimated that the machine can be used for four years. At the end of the 4th year (2022), it is estimated that the machine can be sold for $4,880. The management of Golden Ltd is considering which method to use in computing the depreciation of the hydraulic press machine. (a) Explain what is depreciation and why depreciation is required in accounting. (5 marks) (b) Prepare the depreciation schedule for the hydraulic press machine for the years 2019, 2020, 2021 and 2022 if the company uses: (i) The straight-line method of depreciation. (4 marks) (5 marks) (ii) The reducing balance method of depreciation applied at a rate of 50% per year. (c) On 31 December 2021, the company decided to sell the hydraulic press machine for price of $12,000. Calculate the gain or loss on disposal of the hydraulic press machine if the company uses: (i) the straight-line method of depreciation. (3 marks) (ii) the reducing balance method of depreciation applied at a rate of 50% per year. (3 marks)