Zulaga Sales acts as sales representative for a number of small companies. The owner of the company has decided to change from leased vehicles to company-owned vehicles for its sales representatives. On July 1, 20x2, the company plans to purchase 5 vehicles at a cost of $33,600 each. Each vehicle has an estimated residual value of $4,500, a useful life of 6 years, and will be driven a total of 150,000 kilometres. Luis, the owner of the company, would like to choose a depreciation method that will result in the lowest depreciation expense for the year ended June 30, 20x3.

Luis has also decided to provide the companys 5 sales representatives with new computers. Luis has found someone willing to buy the 5 old computers now, for a total of $2,500 cash. The 5 old computers have a total cost of $25,000 and total accumulated depreciation of $20,000, after recording depreciation expense up to June 28, 20x2.

Required -

a. Calculate the first years total depreciation expense on the new vehicles, assuming the company chooses to use the straight-line method of depreciation.

b. Calculate the first two years total depreciation expense on the new vehicles, assuming the company chooses to use the diminishing balance method of depreciation at the rate of 33%.

c. Calculate the first years total depreciation expense on the new vehicles, assuming the company chooses to use the units-of-production method of depreciation and the 5 new vehicles are expected to be driven a total of 75,000 kilometres in the year ended June 30, 20x3.

d. Prepare the journal entry that would be made to record the sale of the old computers, assuming they are sold for a total of $2,500 cash.