Max Company purchased a machine on January 1, paying cash of $270,000. The machine has an estimated useful life of five years (or the production of 60,000 units) and an estimated residual value of $30,000.

If the machine was used to produce and sell 17,000 units in year two, what would depreciation expense be under the units of production method?

Select one:

a. $68,000

b. $202,000

c. $93,500

d. $76,500

e. $232,000

What is the book value of the machine after three years using the sum of the years digits method?

Select one:

a. $68,000

b. $54,000

c. $78,000

d. $48,000

e. $96,000