Depreciation, calculations, entries and effects At the beginning of 2018, Garrison Ltd acquired machinery that cost $100 000, had a useful life of 10 years and zero scrap value. During 2018 and 2019...

Depreciation, calculations, entries and effects At the beginning of 2018, Garrison Ltd acquired machinery that cost $100 000, had a useful life of 10 years and zero scrap value. During 2018 and 2019 the company depreciated this machinery using the straight-line method. Assume a tax rate of 40 per cent. 1 Calculate the depreciation expense Garrison has recognised for 2018 and 2019 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 2018 and 2019 (assume a depreciation rate of 20 per cent). 3 Calculate the effects of changing from straight-line to reducing balance on the following: a the balance sheet at the end of 2018 b the income statement for 2019 c the balance sheet at the end of 2019.