1) On January 1, 2011, XYZ, Inc. buys a piece of equipment for $500,000. The company estimates the equipment will last for eight years, have a salvage value of $40,000 and produce an estimated 2.3 million units during its lifetime. a) Calculate depreciation expense for each year using the straight-line method. b) Actual production is as follows-305,000 (year 1), 300,000 (year 2), 313,000 (year 3) and 285,000 (year 4). Calculate depreciation expense for each of the first four years using the activity method. c) Calculate depreciation expense for the first four years (2011-2014) using the double- declining method. 2) Using your answer for "a" when you used straight-line as your method, let's assume at the end of year 5 XYZ spends $120,000 doing a major overhaul of the equipment that greatly improves the efficiency of the equipment and extends the useful life. You estimate the equipment will now last six more years from this point and have a new estimated salvage value of $70,000. a) Make the journal entry for the overhaul of the equipment b) Calculate the new depreciation expense going forward for year 6 assuming you are still using the straight-line method.