Three different companies each purchased trucks on January 'I, Year 'I, for $55,000. Each truck was expected to last four years or 250,000 miles. Salvage value was estimated to be $4,000. All three trucks were driven 17,000 miles in Year 1. 56,000 miles in Year 2. 43,000 miles in Year 3, and 72,000 miles in Year 4. Each of the three companies earned $45,000 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. Required a-1. Calculate the net income for Year 1. 3-2. Which company will report the highest amount of net income for Year 1? b-1. Calculate the net income for Year 4. b-2. Which company will report the lowest amount of net income for Year 4'? (2-1. Calculate the book value on the December 31. Year 3, balance sheet. 12-2. Which company will report the highest book value on the December 31, Year 3, balance sheet? d-1. Calculate the retained earnings on the December 31, Year 4. balance sheet d-2. Which company will report the highest amount of retained earnings on the December 31, Year 4, balance sheet? e. Which company will report the lowest amount of cash ow from operating activities on the Year 3 statement of cash flows? 9 Answer Is not complete. Complete this question by entering your answers In the tabs below. J Required A Required B Required C Required D Required E a-1. Calculate the net income for Year 1. [Rnund "Per Unit Cust' tn 3 decimal places.) a-2. which company will report the highest amount of net income for Year 1? Company C Hig hast net income Required 5 > x Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Required E :b-1. Calculate the net income for Year 4. (Round your "Per Unit Cost" to 3 decimal places.) :b-2. Which company will report the lowest amount of net income for Year 4? Net Income b- 1 Company A 32,000 Company B 12,750 Company C b- 2 Lowest net income X Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Required E :c-1. Calculate the book value on the December 31, Year 3, balance sheet. (Round "Per Unit Cost" to 3 decimal places.) c-2. Which company will report the highest book value on the December 31, Year 3, balance sheet? Book Value C- Company A Company B Company C C- 2 Highest book value x Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Required E d-1. Calculate the retained earnings on the December 31, Year 4, balance sheet. d-2. Which company will report the highest amount of retained earnings on the December 31, Year 4, balance sheet? Retained Earnings d- 1 Company A Company B Company C d- 2 Highest retained earnings
