Solar Innovations Corporation bought a machine at the beginning of the year at a cost of $36,000. The estimated useful life was five years and the residual value was $3,500. Assume that the estimated productive life of the machine is 10,000 units. Expected annual production was year 1, 1,900 units; year 2, 2,900 units; year 3, 1,900 units; year 4,1,900 units; and year 5,1,400 units Required 1. Complete a depreciation schedule for each of the alternative methods a. Straight-line b. Units-of-production. c. Double-declining-balance 2. Which method will result in the highest net income in year 2? Does this higher net income mean the machine was used more efficiently under this depreciation method? Answer is not complete Complete this question by entering your answers in the tabs below Req 1A Req 1B Req 1C Req 2A Req 2B Complete a depreciation schedule for Units-of-production method. (Do not round intermediate calculations.) Income Statement Depreciation Expense Balance Sheet Accumulated Depreciation Book Value Year Cost At acquisition $ 6,840 $ 36,000 0,44036,000 6,84036,000 6,84036,000 ,04036,000 6,840 17,280 24,120 30,960 36,000 S 36,000 29,160 18,720 11,880 5,040 4 Wiater Company operates a small manufacturing facility. On January 1, 2018, an asset account for the company showed the following balances: Equipment Accumulated Depreciation (beginning of the year) $230,000 108,000 During the first week of January 2018, the following expenditures were incurred for repairs and maintenance Routine maintenance and repairs on the equipment Major overhaul of the equipment that improved efficiency 2,250 28,000 The equipment is being depreciated on a straight-line basis over an estimated life of 20 years with a $14,000 estimated residual value The annual accounting period ends on December 31. Required Indicate the effects (accounts, amounts, and +for increase and for decrease) of the following two items on the accounting equation using the headings shown below. (Enter any decreases to Assets, Liabilities or Stockholder's Equity with a minus sign.) 1. The adjustment for depreciation made last year at the end of 2017 2. The two expenditures for repairs and maintenance during January 2018. (Record each entry separately) Answer is complete but not entirely correct. Assets Liabilities s' Equity (10,800) (2.250) 28,000 2017 Accumulated Depreciation Depreciation Expense ( 10.800) 2018 Cash Repairs and Maintenance Expense2.250) Equipment
