On January 1, 2016, Whispering Company, a small machine-tool manufacturer, acquired for $2,590,000 a piece of new industrial equipment. The new equipment had a useful life of 5 years, and the salvage value was estimated to be $45,000. Whispering estimates that the new equipment can produce 15,200 machine tools in its first year. It estimates that production will decline by 1,690 units per year over the remaining useful life of the equipment. The following depreciation methods may be used: (1) straight-line, (2) double-declining-balance, (3) sum-of-the-years'-digits, and (4) units-of-output. For tax purposes, the class life is 7 years. Use the MACRS tables for computing depreciation MACRS Depreciation Rates by Class of Property Recovery3-year 7-year (200% DB) 4.29 24.49 17.49 2.49 8.93* 8.92 8.93 10-year (200% DB) 10.00 18.00 14.40 11.52 9.22 7.37 6.55 6.55 6.56 6.55 15-year (150% DE) 5.00 9.50 8.55 7.70 6.93 6.23 5.90* 5.90 5.91 5.90 5.91 5.90 5.91 5.90 5.91 Year (200% DB) (20096 DB) (150% De) 3.750 7.219 6.677 44.45 4.81 19.20 5.713 5.285 4.888 4.522 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 Compute accumulated depreciation under the following methods: (1) straight-line, (2) double-declining-balance, (3) sum-of-the-years'-digits, and (4) units- of-output for the 3-year period ending December 31, 2018. Ignore present value, income tax, and deferred income tax considerations. (Round cost per unit to 2 decimal palces, e.g. 25.12. Round other intermediate calculations to 6 decimal places, e.g. 1.524687 amd final answers to o decimal places, e.g. 5,125.) Accumulated Depreciation 2016 2017 Methods 2018 1) Straight-line (2) Double-declining-balances (3) Sum-of-the-years'-digits 4) Units-of-output Which depreciation method would maximize net income for financial statement reporting for the 3-year period ending December 31, 2018? The depreciation method would maximize net income. LINK TO TEXT LINK TO TEXT Compute accumulated depreciation by using MACRS and optional straight-line method for the 3-year period ending December 31, 2018. Ignore present value considerations. Accumulated Depreciation 2017 Methods 2016 2018 MACRS Optional straight-line method pute accumulated depreciation by using MACRS and optional straigh-line method for the 3-year period ending December 31, 2018. Ignore preser value considerations Accumulated Depreciation 2017 Methods 2016 2018 MACRS Optional straight-line method LINK TO TEXT LINK TO TEXT Which depreciation method would minimize net income for income tax reporting for the 3-year period ending December 31, 2018 depreciation method would minimize net income. The
