Schrade Company bought a machine for $104,000 cash. The estimated useful life was four years, and the estimated residual value was $6,040. Assume that the estimated useful life in productive units is 124,000. Units actually produced were 47,000 in year 1 and 49,000 in year 2.

1. Determine the appropriate amounts to complete the following schedule.

	Depreciation Expense for		Net Book Value at the End of
Method of Depreciation	Year 1	Year 2	Year 1	Year 2
Straight-line
Units-of-production
Double-declining-balance

2.a Which method would result in the lowest EPS for year 1?

	Straight-line
	Units-of-production
	Double-declining-balance

2.b Which method would result in the lowest EPS for year 2?

	Straight-line
	Units-of-production
	Double-declining-balance

3. Which method would result in the highest amount of cash outflows in year 1?

	Straight-line
	Units-of-production
	Double-declining-balance

4. Indicate the effects of (a) acquiring the machine and (b) recording annual depreciation on the operating and investing activities sections of the statement of cash flows (indirect method) for year 1 (assume the straight-line method).

(a)	The machine acquisition would		cash provided by
	activities by the		cost of
(b)	The depreciation cost would		the cash provided by
	activity by