Question C3 Part I Speedy Limited bought a machine for $4,800,000 on 4 July 2015. The machine had an estimated residual value of $800,000, and estimated useful life of ten years, or had an estimated operation output of 1,000,000 hours. The year-end date of the company is 31 December. Required: (a) Compute the depreciation expenses on this machine in 2015 and 2016 respectively by using the following methods: (i) Straight-line (with depreciation calculated to the nearest whole month); (2 marks) ii) 200%-declining-balance (with half-year convention); and (2 marks) (iii) Units-of-output method (hours of operation 60,000 in 2015; 150,000 in 2016). (2 marks) (b) Which one(s) of the three methods in part (a) above would be more appropriate for the machine which is specifically acquired for the use in a project last for 8 years? Explain briefly. (2 marks) Part II In June 2013, Sky Limited purchased a machine for $3,200,000. It had an estimated useful life of 5 years and a $200,000 residual value. The Company uses straight-line depreciation method and applies the half-year convention. On 31 July 2016, the Company sold the machine for $1,000,000 cash. Assume the Company adjusts its accounts annually at the year-end on 31 December Required: (a) Prepare the journal entries to update depreciation charge in 2016; and (2 marks) (b) Prepare the journal entries at the time of disposal. (4 marks)