Question
II. Chapter 9 Depreciation Tome Company purchased a machine for $105,000 cash. The estimated useful life is five years, and the estimated residual value
II. Chapter 9 Depreciation Tome Company purchased a machine for $105,000 cash. The estimated useful life is five years, and the estimated residual value is $5,000. Assume that the estimated useful life in productive units is 150,000. Units actually produced were 40,000 in year 1 and 45,000 in year 2. Required: 1) Determine the appropriate amounts to complete the following schedule. Show computations. Method of Depreciation Year 1 Depreciation Expense for Year 2 Book Value at the End of Year 1 Year 2 Straight-line Units-of-production Double-declining-balance 2) Which method would result in the lowest net income for year 1? For year 2?
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