Problem

On October $1,2022,$ Coi LeRay Technology Firm purchases a new Engraving Machine for $$83,000$ to add to

its design studio. The Engraving machine is used to stamp and engrave logos into metal. The policy is to sell

and replace the machine after the earlier of $3$ years, or $75,000$ stampings. The average selling price of the

used machine is $$8,000.$ This particular machine was used for $18,000$ stamps in $2022,34,000$ in $2022$ and

$23,000$ in $2024.$ Year end is December $31.$

Instructions

a$.$ Calculate $2022,2023$ and $2024$ depreciation expense under each of the following methods:

$($i$)$ Straight$-$line $(3$ Marks$)$

$($ii$)$ Diminishing$-$Balance using a $40\%$ rate $($Please use CRA $50\%$ rule for year $1).(5$ Marks$)$

$($iii$)$ Units$-$of$-$production $(5$ Marks$)$

b$.$ Which method will best match the estimated pattern in which the asset's economic benefits are expected

to be consumed? Explain. $(3$ Marks$)$

a$.$