Problem $6-24$A $($Algo$)$ Determining the effect of depreciation expense on financial statements LO $6-2,6-$

$3,6-4$

Three different companies each purchased trucks on January $1,$ Year $1,$ for $$60,000.$ Each truck was expected to last four years or

$250,000$ miles. Salvage value was estimated to be $$5,000.$ All three trucks were driven $79,000$ miles in Year $1,47,000$ miles in Year $2,$

$51,000$ miles in Year $3,$ and $74,000$ miles in Year $4.$ Each of the three companies earned $$49,000$ of cash revenue during each of the

four years. Company A uses straight$-$line depreciation, company B uses double$-$declining$-$balance depreciation, and company $C$ uses

units$-$of$-$production depreciation.

Answer each of the following questions. Ignore the effects of income taxes.

Required

a$-1.$ Calculate the net income for Year $1.$

a$-2.$ Which company will report the highest amount of net income for Year $1?$

b$-1.$ Calculate the net income for Year $4.$

b$-2.$ Which company will report the lowest amount of net income for Year $4?$

c$-1.$ Calculate the book value on the December $31,$ Year $3,$ balance sheet.

c$-2.$ Which company will report the highest book value on the December $31,$ Year $3,$ balance sheet?

d$-1.$ Calculate the retained earnings on the December $31,$ Year $4,$ balance sheet.

d$-2.$ Which company will report the highest amount of retained earnings on the December $31,$ Year $4,$ balance sheet?

e$.$ Which company will report the lowest amount of cash flow from operating activities on the Year $3$ statement of cash flows?

Complete this question by entering your answers in the tabs below.

Complete this question by entering your answers in the tabs below.

Complete this question by entering your answers in the tabs below.

Required A Required B

Required D

Required $E$

c$-1.$ Calculate the book value on the December $31,$ Year $3,$ balance sheet. $($Round "Per Unit Cost" to $3$ decimal places.$)$

$c-2.$ Which company will report the highest book value on the December $31,$ Year $3,$ balance sheet?

Complete this question by entering your answers in the tabs below.

Complete this question by entering your answers in the tabs below.