Jimmy Company purchase a machine for $40,000 on 1 January 2018. The company expects the service life of the machine to be 5 years. During that time, it is expected that the machine's useful life will be 200,000 hours. The anticipated salvage value is $3,000. The machine was disposed of after 5 years of use. Actual hour used during the five years of the asset's life was: 

In 2018:            50,000 hours used 

In 2019:            40,000 hours used 

In 2020:            35,000 hours used

In 2021:            45,000 hours used 

In 2022:            30,000 hours used 

Required: 

1. Prepare the 5 years depreciation schedule for the machine. Find the depreciation expense and the book value of the machine for each of the 5 years using the following depreciation methods

- Straight line 

- Declining Balance method 

- Units of Activity 

2. Assume on 31 March 2020, the company sell the machine for $10,000. Prepare journal entry to record the disposal of the machine using declining balance method. 

3. Suppose profit before depreciation of Jimmy was $110,000 for 2018, calculate profit after depreciation for each depreciation method. What are your conclusion about relationships between depreciation method and net income?