On January 2, 2018, On Time Delivery Service purchased a truck at a cost of $75,000. Before placing the truck in service, On Time spent $2,200 painting it, 5600 replacing tires, and $10,200 overhauling the engine. The truck should remain in service for five years and have a residual value of $10,000. The truck's annual mileage is expected to be 27,000 miles in each of the first four years and 12,000 miles in the fifth year120,000 miles in total. In deciding which depreciation method to use, Jordan Lipnik, the general manager, requests a depreciation schedule for each of the depreciation methods (straight-line, units-of-production, and double-declining-balance) Read the requirements Requirement 1. Prepare a depreciation schedule for each depreciation method, showing asset cost, depreciation expense, accumulated depreciation, and asset book value. Begin by preparing a depreciation schedule using the straight-line method. Book Straight-Line Depreciation Schedule Depreciation for the Year Asset Depreciable Useful Depreciation Accumulated Date Cost Cost Life Expense Depreciation 1-2-2018 12-31-2018 12-31-2019 Value 12-31-2020 12-31-2021 12-31-2022 Before completing the units-of-production depreciation schedule, calculate the depreciation expense per unit. Select the formula, then enter the amounts and calculate the depreciation expense per unit (Round depreciation expense per unit to two decimal places.) Depreciation per unit Prepare a depreciation schedule using the units-of-production method. (Enter the depreciation per unit to two decimal places, $X.XX.) Book Units-of-Production Depreciation Schedule Depreciation for the Year Asset Depreciation Number of Depreciation Accumulated Date Cost Per Unit Units Expense Depreciation 1-2-2018 12-31-2018 12-31-2019 Value = 12-31-2020 = 12-31-2021 x 12-31-2022 Prepare a depreciation schedule using the double-declining-balance (DDB) method. (Round depreciation expense to the nearest whole dollar.) Book Double-Declining-Balance Depreciation Schedule Depreciation for the Year Asset Book DDB Depreciation Accumulated Date Cost Value Rate Expense Depreciation 1-2-2018 12-31-2018 12-31-2019 Value 12-31-2020 x = 12-31-2021 x 12-31-2022 Requirement 2. On Time prepares financial statements using the depreciation method that reports the highest net income in the early years of asset use. Consider the first year that On Time uses the truck. Identify the depreciation method that meets the company's objectives. The depreciation method that reports the highest net income in the first year is the method. It produces the depreciation expense and therefore the highest net income