Capitalization of machine costs for correct depreciation

Steps:

• Calculate machine's capital cost: purchase $16,000 + delivery$4,000 + installation $600 =$20,600 (insurance $100 is revenue expense, not capitalized).
• Compute correct depreciation: 25% × $20,600 =$5,150.
• Draft depreciation charge: $500 (understates expense by$5,150 - $500 =$4,650, overstating profit).
• Information ambiguous on treatment of delivery/installation/insurance in draft (e.g., expensed or capitalized?), preventing precise understatement calculation.

Not enough information.

Final answer: Not enough information.