QUESTION 4 (14 marks) Part 1 On August 1, 2017, a company purchased new machinery with an estimated useful life of 10 years. Cost of the machinery was $50,000, with a residual value of $5,000. Required: Compute the depreciation on this machinery in 2017 and 2018 using 200%-declining-balance method and the half-year convention. (4 marks) Part II On January 1, 2018, a company purchased a truck for $77,000 with a $5,000 residual value and a useful life of six years. The company calculated depreciation using the straight-line method to the nearest month. On December 31, 2019 the company sold the truck for $40,000 cash. Required: (Explanation for the journal entry is NOT required.) Prepare the journal entry to record the sale of truck. (4 marks) Part III If a capital expenditure is mistakenly treated as a revenue expenditure, how will the profit of the current year be affected? Will this error have any effect on the profit reported in future years? Explain. (6 marks)