Schrade Company bought a machine for $130,000 cash. The estimated useful life was four years, and the estimated residual value was $6,240. Assume that the estimated useful life in productive units is 136,000. Units actually produced were 59,000 in year 1 and 61,000 in year 2.

1. Determine the appropriate amounts to complete the following schedule. (Round your answers to the nearest dollar amount. Do not round intermediate calculations.)

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).