Three different companies each purchased trucks on January 1, 2018, for $70,000. Each truck was expected to last four years or 200,000 miles. Salvage value was estimated to be $5,000. All three trucks were driven 66,000 miles in 2018, 41,000 miles in 2019, 39,000 miles in 2020, and 61,000 miles in 2021. Each of the three companies earned $59,000 of cash revenue during each of the four years. Company A uses straight-line depreciation, company B uses double-declining-balance depreciation, and company C uses units-of-production depreciation.

Answer each of the following questions. Ignore the effects of income taxes.

Problem 6-24 Part a

Required

1. a-1. Calculate the net income for 2018? (Round "Per Unit Cost" to 3 decimal places.)

Company A:

Company B:

Company C:

1. a-2. Which company will report the highest amount of net income for 2018?

• Company A

• Company B

• Company C

• All of the choices

b-1. Calculate the net income for 2021? (Round "Per Unit Cost" to 3 decimal places.)

Company a:

Company b:

Company c:

c-1. Calculate the book value on the December 31, 2020, balance sheet? (Round "Per Unit Cost" to 3 decimal places.)

Company a

Company b

company c

d-1. Calculate the retained earnings on the December 31, 2021, balance sheet?

Company a:

Company b:

Company c:

What can you conclude concerning the effects of the choice of different depreciation methods on the financial statements over the life of the assets? Include comments regarding net income, balance sheet amounts and cash flow.