JCR Co. purchased a piece of machinery of March 1, 2017, for $1,000,000 and paid $500,000 to have it installed. The machine is expected to have a useful life of 10 years, and JCR estimates it will be able to sell the machine at the end of its useful life for $50,000. During its useful life, the machine is expected to produce 1,000,000 widgets. JCR depreciates the machinery from its date of acquisition.

Assume JCR uses the units-of-production method of depreciation, and that the machine produces 75,000 widgets in both year 1 (2017) and 2 (2018). What is depreciation expense on JCRs 2017 income statement?

Group of answer choices

$108,750

None of the above.

$112,500

$217,500

$75,000

Assume that JCR uses straight-line depreciation. What is the book value of the machine on JCRs 2017 year-end balance sheet?

Group of answer choices

$916,667

$1,355,000

$905,000

None of the above.

$1,379,167

JCR sold the machine on 4/1/18 for $1,000,000. Assuming JCR uses straight-line depreciation, what amount should the company report as a gain (loss) related to this sale?

Group of answer choices

($337,500)

None of the above.

($210,000)

($200,000)

($342,917)

What is the effect on the accounting equation when a company records an entry to depreciate a long-lived asset?

Group of answer choices

Contra-assets increase; liabilities increase

None of the above.

Expenses increase; liabilities increase

Assets increase; expenses increase

Expenses increase; contra-assets increase