Question $1$: Calculating Depreciation $(16$ marks$)$

Nu's Nachos is a restaurant in downtown Kitchener. On May $1^{st},2018$ they purchased a new

automated nacho machine for the business that had a total cost of $$20,000.$ The machine is

expected to last $5$ years at which time it will have a residual value of $$2,000.$ It is expected that

the machine will be able to produce $400,000$ nachos over its useful life. All depreciation will be

calculated by pro$-$rating depreciation to the nearest full month. Nu's Nachos has a December

${31}^{st}$ year end.

The machine produced the following amount of nachos each year.

Instructions:

a$)$ Calculate depreciation expense of the machine using the straight$-$line method for the

entirety of the asset's useful life. $(3$ marks$)$

b$)$ Calculate depreciation expense of the machine using the diminishing$-$balance method

for the entire five years of the asset's useful life. Use the double the straight$-$line rate..

$(8$ marks$)$

c$)$ Calculate depreciation expense of the machine using the units of production method

$(5$ marks$)$ THIS IS THE FORMAT OF THE ANSWER: Show calculations here

a$)$ Straight $-$Line $$

Year Depreciable Amount Rate Depreciation Expense Accumulated Depreciation Carrying Amount

$2018$

$2019$

$2020$

$2021$

$2022$

$2023$

b$)$ Double$-$Diminishing

Year Depreciable Amount Rate Depreciation Expense Accumulated Depreciation Carrying Amount

$2018$

$2019$

$2020$

$2021$

$2022$

$2023$

c$)$ Units of production

Cost per unit

Year Depreciable Amount Units Depreciation Expense Accumulated Depreciation Carrying Amount

$2018$

$2019$

$2020$

$2021$

$2022$

$2023$