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Skysong Company purchased Machine #201 on May 1, 2020. The following information relating to Machine #201 was gathered at the end of May. Price
Skysong Company purchased Machine #201 on May 1, 2020. The following information relating to Machine #201 was gathered at the end of May. Price Credit terms $95,200 2/10, n/30 $896 $ 4,256 $11,760 Freight-in Preparation and installation costs Labor costs during regular production operations It is expected that the machine could be used for 10 years, after which the salvage value would be zero. Skysong intends to use the machine for only 8 years, however, after which expects to be able to sell it for $1,680. The invoice for Machine #201 was paid May 5, 2020. Skysong uses the calendar year as the basis for the preparation of financial statements. Compute the depreciation expense for the years indicated using the following methods. Depreciation Expense (1) Straight-line method for 2020 (2) Sum-of-the-years'-digits method for 2021 (3) Double-declining-balance method for 2020 Suppose Jennifer Davis, the president of Skyso will allocate less of the company's depreciation What method would you recommend? Activity Method Decreasing Change Method Special Depreciation Method Straight-line Method
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