Austin Corporation uses accrual accounting and issues financial statements every December 31. The company purchased machinery on January 1, 2016, at a cost of $310,000. The estimated useful life of the machinery is five years or 50,000 hours, with an estimated salvage value of $10,000. The company has used the straight-line method of deprecation since 2016 and is considering changing to the units-of-activity method of depreciation. If Austin Corporation uses the equipment for 5,000 hours in 2019, should the company change from the straight-line method to the units-of-activity approach? Austin Company has identified a number of concerns including a desire to minimize taxes, attract additional investors and record a constant amount of depreciation expense each period. Answer the following questions in addressing this issue.

Q1: What amount of depreciation expense would Austin Corporation record in 2019 under the straight-line method?

Q2: What amount of depreciation expense would Austin Corporation record in 2019 under the units-of-activity method?

Q3: Use the problem-solving model to evaluate whether Austin Corporation should change from the straight-line method to the units-of-activity approach. Make sure to apply each step of the model. For example, consider quantitative and qualitative issues and examine all stakeholders. Problem Solving Method: 1. Define the problem 2. Identify the alternatives 3. Evaluate the alternatives 4. Selection of alternatives 5. Implementation