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Alladin Company purchased Machine #201 on May 1, 2025. The following information relating to Machine #201 was gathered at the end of May. The invoice
Alladin Company purchased Machine \#201 on May 1, 2025. The following information relating to Machine \#201 was gathered at the end of May. The invoice for Machine \#201 was paid May 5, 2025. Alladin uses the calendar year as the basis for the preparation of financial statements. Instructions a. Compute the depreciation expense for the years indicated using the following methods. (Round to the nearest dollar.) 1. Straight-line method for 2025 2. Sum-of-years'-digits method for 2026 3. Double-declining-balance method for 2025 b. Suppose Kate Crow, the president of Alladin, tells you that because the company is a new organization, she expects it will be several years before production and sales reach optimum levels. She asks you to recommend a depreciation method that will allocate less of the company's depreciation expense to the early years and more to later years of the assets' lives. What method would you recommend? NOTE: Enter a formula with cell references into the yellow shaded input cells. When calculating depreciation, use one of Excel depreciation functions with cell references. b. Recommendation and comments: Activity method of Depreciation will allocate less of the company's depreciation expense to the early years and more to later years. Depreciation amount will be based on Number of hours or units not on the number of years. So Activity method of Depreciation is recommendable
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