At the beginning of 2015, Garrison Ltd acquired machinery that cost $100 000, had a useful life of 10 years and zero scrap value. During 2015 and 2016, the company depreciated this machinery using the straight-line method.

1. Calculate the depreciation expense Garrison has recognised for 2015 and 2016 and write a journal entry to record either year's amount.

2. Calculate the depreciation expense Garrison would have recorded, had it been using the reducing balance method for 2015 and 2016 (assume a depreciation rate of 20 percent).

3. Calculate the effects of changing from straight-line to reducing balance on the following: 

a. The balance sheet at the end of 2015

b. The income statement for 2016 

c. The balance sheet at the end of 2016.