Swanson & Hiller, Inc., purchased a new machine on September 1 of the current year at a cost of $149,000. The machines estimated useful life at the time of the purchase was five years, and its residual value was $9,000. The company reports on a calendar year basis.

Required: a-1. Prepare a complete depreciation schedule, beginning with the current year, using the straight-line method. (Assume that the half-year convention is used).

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). (Round your answers to the nearest dollar amount.)

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). (Round your answers to the nearest dollar amount.)

b. Which of the three methods computed in part a is most common for financial reporting purposes?

c. Assume that Swanson & Hiller sells the machine on December 31 of the fourth year for $30,000 cash. Compute the resulting gain or loss from this sale under each of the depreciation methods used in part a. (Use rounded book values for calculations. Round your final answers to the nearest whole dollar.)

For A 1-3.

Year	Depreciation Expense	Depreciation Expense	Book Value
1
2
3
4
5
6

For C.

Straight line	Gain/loss on disposal?	$
200 percent declining balance	Gain/loss on disposal?	$
150 percent declining balance	Gain/loss on disposal?	$