Rashed Company acquired a machinery on January 1, 2015 amounting AED50,000. The useful life of the machinery is expected to be 4 years. The salvage value at the end of the life of the machinery is expected to be AED4,000. The machinery can produce maximum 40,000 units during its useful life.

Required: -

1. Calculate the amount of depreciation expense for the year 2016 by using straight-line depreciation method. (2 marks)
2. Calculate the amount of depreciation expense for the year 2016 by using units-of-production depreciation method if total 8,000 units are produced during the year 2016. (2 marks)
3. Show a journal entry to record depreciation expense of the machinery at the end of the year 2016 assuming straight-line depreciation method is used. (1 mark)
4. How you can link the matching principle in accounting with the concept of charging depreciation expense of an asset in the multiple accounting periods? (1 mark)