P6-45A On January 3, 2020, BW. Soffer Inc. paid $224,000 for a computer system. In addition to the basic purchase price, the company paid a setup fee of $6,200, $6,700 sales tax, and $3,100 for special installation. Management estimates that the computer will remain in service for five years and have a residual value of $20,000. The computer will process 50,000 documents the first year, decreasing annually by 5.000 during each of the next four years (that is, 45,000 documents in 2021, 40,000 documents in 2022, and so on). In trying to decide which depreciation method to use, the company president has requested a deprecia-tion schedule for each of three depreciation methods (straight-line, units-of-production, and double-diminishing-balance) Requirements 1. Prepare a depreciation schedule for each of the three depreciation methods listed, showing asset cost, depreciation expense, accumulated depreciation, and asset carrying amount 2. B.W. Soffer Inc. reports to shareholders and creditors in the financial statements using the depreciation method that maximizes reported income in the early years of asset use Consider the first year B.W. Soffer Inc. uses the computer system. Identify the depreciation method that meets the company's objectives Discuss the advantages of each depreciation method. A JP P6-46A The excerpts that follow are adapted from financial statements of a Canadian not-for-profit organization (amounts in thousands) Balance Sheet Assets Total current assets Property, plant, and equipment. Less accumulated depreciation. Long-term investments. $261,015 17 61,225-INA (22,725) 147.1653 March 31 2020 2019 $277,631 68,406 (26,909) 108,302 For the Year Ended March 31 2020 2019 Consolidated Statement of Cash Flows Operating excess of revenues over expense.. 13,068 15,321 Noncash items affecting net income: Depreciation 4,184 3,748 Cash flows from investing activities: Additions to property, plant, and equipment. Reduction of (addition to) long-term investments. (7,181) (8.623) 38,863 (96,316) Requirements 1. How much was the entity's cost of property, plant, and equipment at March 31, 2020? How much was the carrying amount of property, plant, and equipment? Show computations. evidence? 2. The financial statements give four pieces of evidence that the entity purchased property, plant, and equipment and sold long-term investments during 2020. What is the 3. Prepare T-accounts for Property, Plant and Equipment, Accumulated Depreciation, and Long-Term Investments. Then show all the activity in these accounts during 2020. Label each increase or decrease and give its dollar amount. Why is depreciation added to net income on the statement of cash flows? WE TH FRI FRI SAT SUN MON TUE