Spacely Sprockets, Inc. invested $5,045,000 for new manufacturing equipment for its plant in Jetson, NY. The equipment was anticipated to have a useful life of 10 years, or 31,900 machine hours and a residual value of $496,000. In its first year in operation the equipment was used for 2,370 hours and an additional 2,860 hours in its second year of usage. The Income Statement for years 1 and 2 of Spacely Sprockets, Inc. are shown below. All items rounded to nearest whole dollar. Spacely Sprockets, Inc. Year 1 Year 2 Net Sales $34,852,000 $36,426,000 COGS $21.957,000 $24.246,000 Gross Profit $12,895,000 $12,180,000 Operating Expenses $7,745,000 $8,074,000 (before adding in Depreciation) Income from Operations $5,150,000 $4,106,000 Income Tax Expense (at 30%) $1.545,000 $1,231,800 Net Income $3,605,000 $2,874,200 Round all items to the nearest whole dollar and use rounded values for all future calculations. (Cost Residual Value) / Number of Units Depreciation per unit / Year Depreciation per unit X Number of hours used - Total Depreciation Year 1 X = Year 2 X = 2. Recalculate the Income Statement for Year 1 and Year 2 including the Depreciation Expense as part of the Operating Expenses. Year 1 Year 2 Spacely Sprockets, Inc. Net Sales COGS Gross Profit Operating Expenses (before adding in Depreciation) Income from Operations Income Tax Expense (at 30%) Net Income