Help Save&Exit Subn Check my work Torge Company bought a machine for $89,000 cash. The estimated useful l in year 2 Required 1. Determine the appropriate amounts to complete the following schedule. (Do not round intermediate calculations.) life was five years and the estimated residual value was that the estimated useful Me in productive units is 189,000 Units actually produced were 50400 in year 1 and 56,700 2-a. Which method would result in the lowest net income for year 1? O Units-of-production Straight-line Prev 14 of 15 E Next > P11 20 0 Help Save&Exit Check my w paid $5,040,000 for an oil reserve estimated to hold 80,000 barrels of olil. Oil production is expected to be Texas Oil Company (TOC) 13,000 barrels in year 1, 54000 barrels in year 2, and 13,000 barrels in year 3. TOC expects to begin selling barrels from its oil inventory in year 4. Required: 1. Assuming these estimates prove to be accurate, show the balances in the oil reserve, accumulated depletion, and oil inventory accounts in each of the three years Oil Reserve Accumulated Depletion Oil Reserve, Net Oil Inventory 2. What effect does this yearly depletion have on the income statement? O These costs are removed from one asset (oil reserve) and capitaized in a different asset (oil inventory), so there is no effect on the income statement until the oil inventory is sold O These costs are removed from one asset (oil reserve) and capitalized in a different asset (oil inventory), so there is no effect on the income statement even after the oil inventory is sold C Prev15 of 15 Next MacBook Pro 20 4 0