ABC Co. acquired equipment for $500,000 in cash on January 1, 2022. In order for the piece of equipment to function as the company needed, it cost $25,000 to transport the equipment from the manufacturer to ABC Co.s main facility. It also cost $10,000 to install the equipment including electrical and mechanical work. It is estimated to cost $2,500 in utility costs each month to operate. The equipment is expected to have a useful life of 10 years, produce 100,000 units over the life of the asset and have a residual value of $10,000 when the asset is disposed of.

Required:

1. Using the information above, calculate the depreciation expense, accumulated depreciation and ending net book value as of the end of 2022 and 2023 using straight line depreciation.
2. Calculate the same balances for the same period using double declining method for depreciation.
3. Calculate the same balances for the same period using the units of production method assuming the unit produced 3,000 units in 2022 and 7,500 units in 2023.
4. Which method of depreciation will result in the highest amount of net income in 2022 and 2023.