Task 4: Evaluating Deprecation Methods - Calculating Inventory Value - must show work by typing in how you found the amounts for full credit. Just entering the amount gets you partial credit.

You're the accountant for Westside Greenhouse. The company plans to purchase a new watering machine at a cost of $13,000. The machine has an estimated disposal value of $325 and an estimated useful life of 5 years.

(1) Determine the annual depreciation, accumulated depreciation and book value of the machine using the Straight Line, declining balance and sum-of-the-year Digits methods. (27 pts)

Plant Asset Straight Line Method Declining Balance Method Sum-of-the-years digits Method

Year 1

Depreciation Expense $- $- $-

Accumulated Depreciation$- $- $-

Book Value $- $- $-

Year 2

Depreciation Expense $- $- $-

Accumulated Depreciation$- $- $-

Book Value $- $- $-

Year 3

Depreciation Expense $- $- $-

Accumulated Depreciation$- $- $-

Book Value $- $- $-

(2) Which method yields the highest book value after three years?_______________(2 pts)

(3) Which depreciation method allows the maximum amount of depreciation over the 3 years? ____________________(2 pts)

(4) Assume at the end of three years, Westside Greenhouse can sell the watering machine for $3,400. Answer the following questions:

a.) Would any of the depreciation methods provide for a gain on the sale of the machine? If so, which one and how much would the gain be?

b.) Would any of the methods result in a loss on the sale? If so, which method and how much would the loss be?

paragraph on which depreciation would you recommend and why?