Swanson & Hiller, Inc., purchased a new machine on September 1 of the current year at a cost of $138,000. The machines estimated useful life at the time of the purchase was five years, and its residual value was $8,000. The company reports on a calendar year basis.

a-2. Prepare a complete depreciation schedule, beginning with the current year, using the 200 percent declining-balance method. (Assume that the half-year convention is used).

a-3. Prepare a complete depreciation schedule, beginning with the current year, using the 150 percent declining-balance, switching to straight-line when that maximizes the expense. (Assume that the half-year convention is used).

c. Assume that Swanson & Hiller sells the machine on December 31 of the fourth year for $30,500 cash. Compute the resulting gain or loss from this sale under each of the depreciation methods used in part a.