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(1) Pharoah Ltd. purchased a new machine on April 4, 2014, at a cost of $168,000. The company estimated that the machine would have a
(1) Pharoah Ltd. purchased a new machine on April 4, 2014, at a cost of $168,000. The company estimated that the machine would have a residual value of $14,000. The machine has a four-year life.
Calculate depreciation for the machine under each of the following method - Diminishing-balance using double the straight-line rate for 2014 through to 2018.
(2) Which depreciation method results in the highest net income? Why?
A) Straight Method
B) Diminishing-balance method
C) Units-of-production method
D) No Impact
E) All three methods are the same
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