Question $4$

A machine was acquired on January $1,2015,$ at a cost of $$80,000.$ The machine was originally estimated to have a residual value of $$5,000$ and an estimated life of $5$ years. The machine is expected to produce a total of $100,000$ components during its life, as follows: $15,000$ in $2015,20,000$ in $2016,20,000$ in $2017,30,000$ in $2018,$ and $15,000$ in $2019.$

Instructions

$($a$)$ Calculate the amount of depreciation to be charged each year, using each of the following methods:

Straight$-$line method

Units$-$of$-$production

Double diminishing$-$balance

$($b$)$ Which method results in the highest depreciation expense during the first two years? Over all five years?