Unique Packaging Limited (UP Ltd) is local company that produces packing material for its clients. The

company has purchased new machine that manufactures standard boxes used in packing of various

products. The price of machine is Rs.7,000,000. The transportation charges equal 2% of machines price

and are paid by seller. UP Ltd has also paid for installation charges (5% of price) and test runs (60% of

installation charges) to bring the machine into operating condition. Accountants estimate that asset will

be used for 5 years and at end of useful life it will be sold for Rs.2,000,000. The manufacturer of

machine has informed that lifetime capacity of machine is 10,000,000 units.

Requirements:

a) Prepare depreciation schedule for machine using double declining balance method

b) Using units of production method prepare depreciation schedule for first three years if

number of packing boxes produced is 1,500,000 in first year, 2,200,000 in second year and

3,400,000 in third year.