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Solar Innovations Corporation bought a machine at the beginning of the year at a cost of $38,000. The estimated useful life was five years and
Solar Innovations Corporation bought a machine at the beginning of the year at a cost of $38,000. The estimated useful life was five years and the residual value was $4,000. Assume that the estimated productive life of the machine is 10,000 units. Expected annual production was year 1, 2,000 units; year 2, 3,000 units; year 3, 2,000 units; year 4, 2,000 units; and year 5, 1,000 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
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