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Torge Company bought a machine for $67,100 cash. The estimated useful life was five years, and the estimated residual value was $5,700. Assume that
Torge Company bought a machine for $67,100 cash. The estimated useful life was five years, and the estimated residual value was $5,700. Assume that the estimated useful life in productive units is 153,500. Units actually produced were 40,700 in year 1 and 46,050 in year 2. Required: 1. Determine the appropriate amounts to complete the following schedule. Method of Depreciation Depreciation Expense for Year 1 Year 2 Book Value at the End of Year 1 Year 2 Straight-line Units-of-production Double-declining-balance 2-a. Which method would result in the lowest net income for Year 1? Straight-line O Double-declining-balance O Units-of-production 2-b. Which method would result in the lowest net income for Year 2? O Double-declining-balance Straight-line O Units-of-production 3. Which method would result in the lowest fixed asset turnover ratio for year 1? O Double-declining-balance Straight-line O Units-of-production
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