Holtzman Company is in the process of preparing its financial statements for 2020. Assume that no entries for depreciation have been recorded in 2020. The following information related to depreciation of fixed assets is provided to you. 1. Holtzman purchased equipment on January 2, 2017, for $105,400. At that time, the equipment had an estimated useful life of 10 years with a $6,200 residual value. The equipment is depreciated on a straight-line basis. On January 2, 2020, as a result of additional information, the company determined that the equipment has a remaining useful life of 4 years with a $3,720 residual value. During 2020, Holtzman changed from the double-declining-balance method for its building to the straight-line method. The building originally cost $372,000. It had a useful life of 10 years and a residual value of $37,200. The following calculations present depreciation on both bases for 2018 and 2019. 2018 2019 Straight- Double-Declining Line -Balance $33,480 $74,400 33,480 59,520 3. Holtzman purchased a machine on July 1, 2018, at a cost of $148,800. The machine has a residual value of $19,840 and a useful life of 8 years. Holtzman's bookkeeper recorded straight-line depreciation in 2018 and 2019 but failed to consider the residual value. Show comparative net income for 2019 and 2020. Income before depreciation expense was $372,000 in 2020 and $384,400 in 2019. (Ignore income tax considerations.) HOLTZMAN COMPANY Statement of Income (partial) For the Years 2020 and 2019 2020 2019