Depreciation Methods Gruman Company purchased a machine for $198,000 on January 2, Year 1. It made the following estimates: Service life Production 5 years or 10,000 hours 180,000 units Residual value $ 18,000 In Year 1, Gruman uses the machine for 1,700 hours and produces 50,000 units. In Year 2, Gruman uses the machine for 1,400 hours and produces 30,000 units. If required, round your final answers to the nearest dollar. Required: 1. Compute the depreciation for Year 1 and Year 2 under each of the following methods: a. Straight-line method Year 1 $ 36,000 Year 2 $ 36,000 b. Sum-of-the-years'-digits method Year 1 $ Year 2 $ c. Double-declining-balance method Year 1 $ Year 2 $ d. Activity method based on hours worked Year 1 $ Year 2 $ e. Activity method based on units of output Year 1 $ 2. For each method, what is the book value of the machine at the end of Year 1? At the end of Year 2? . Straight-line method Year 1 $ Year 2 $ . Sum-of-the-years'-digits method Year 1 $ Year 2 $ C. Double-declining-balance method Year 1 $ Year 2 $ 1. Activity method based on hours worked Year 1 $ Year 2 $ . Activity method based on units of output Year 1 $ Year 2 $ 3. If Gruman used a service life of 8 years or 15,000 hours and a residual value of $9,000, what would be the effect on the following under the straight-line, sum-o the-years'-digits, and double-declining-balance depreciation methods? Depreciation expense . Straight-line method Year 1 $ Year 2 $ . Sum-of-the-years'-digits method Year 1 $ Year 2 $ 3. If Gruman used a service life of 8 years or 15,000 hours and a residual value of $9,000, what would be the effect on the following under the straight-line, sum-of- the-years'-digits, and double-declining-balance depreciation methods? Depreciation expense . Straight-line method Year 1 $ Year 2 $ . Sum-of-the-years'-digits method Year 1 $ Year 2 $ C. Double-declining-balance method Year 1 $ Year 2 $ Book value . Straight-line method Year 1 $ 162,000 Year 2 $ 126,000 . Sum-of-the-years'-digits method Year 1 $ Year 2 $ C. Double-declining-balance method Year 1 $ Year 2 $