Exercise P11-12 (LO1, 6) Depreciation Computations-SL, DDB, SYD, Act, and MACRS On January 1, 2019, Locke Company, a small machine-tool manufacturer, acquired a piece of new industrial equipment. Pertinent data follow Cost of equipment Useful life Estimated salvage value Estimated machine tools to be produced in first year Estimated production decline per year over the remaining life of the equipment Class life for tax purposes The following depreciation methods may be used: (1) Straight-line (2) Double-declining balance (3) Sum-of-years-digits (4)Units-of-output Use the MACRS tables for computing depreciation Instructions: $1,260,000 5 years $ 60,000 12.000 1,000 7 years (AICPA adapted) (a) Which depreciation method would maximize net income for financial statement reporting for the 3-year period ending December 31, 2021? Prepare a schedule showing the amount of accumulated depreciation at December 31, 2021, under the method selected. Ignore present value, income tax, and deferred income tax considerations (1) Straight-line using the SLN function Depreciation Accumulated Year Expense Depreciation 2019 2020 2021 (2) Double-declining balance using the DDB function Depreciation Accumulated Year Expense Depreciation 2019 2020 2021 (3) Sum-of-years-digits using the SYD function Depreciation Accumulated Year Expense Depreciation 2019 2020 2021 (4) Units-of-output Note: There is no Excel function for units-of-output Depreciation Year Expense Accumulated Depreciation 2019 2020 2021 (b) Which depreciation method (MACRS or optional straight-line) would minimize net income for income tax reporting for the 3-year period ending December 31, 2021? Determine the amount of accumulated depreciation at December 31, 2021. Ignore present value considerations. General MACRS method (Values taken from the MACRS rates schedule. Depreciation Accumulated Year MACRS Rate Expense Depreciation 2019 2020 2021 Optional straight-line method: Depreciation Accumulated Year MACRS Rate Expense Depreciation 2019 2020 2021