Nicoles Getaway Spa (NGS) purchased a hydrotherapy tub system to add to the wellness programs at NGS. The machine was purchased at the beginning of the year at a cost of $19,000. The estimated useful life was five years and the residual value was $1,000. Assume that the estimated productive life of the machine is 10,000 hours. Expected annual production was year 1, 2,250 hours; year 2, 2,450 hours; year 3, 2,200 hours; year 4, 2,100 hours; and year 5, 1,000 hours.

3. Assume NGS sold the hydrotherapy tub system for $5,700 at the end of year.The following amounts were forecast for year 3: Sales Revenues $56,000; Cost of Goods Sold $44,000; Other Operating Expenses $4,650; and Interest Expense $650. Create an income statement for year 3 for each of the different depreciation methods, ending at Income before Income Tax Expense. (Don't forget to include a loss or gain on disposal for each method.)

NICOLE'S GETAWAY SPA (Forecasted) Income Statement For the Year Ended Year 3 Straight-Line Units-of- Production Double- Declining Balance 0 0 0 Operating Expenses: Total Operating Expenses 0 0 0 0