Torge Company bought a machine for $70,400 cash. The estimated useful life was five years, and the estimated residual value was $6,800. Assume that the estimated useful life in productive units is 159,000. Units actually produced were 41,800 in year 1 and 47,700 in year 2.

Required: 1. Determine the appropriate amounts to complete the following schedule.

	Depreciation Expense for		Book Value at the End of
Method of Depreciation	Year 1	Year 2	Year 1	Year 2
Straight-line
Units-of-production
Double-declining-balance

Which method would result in the lowest net income for Year 1?

a) Straight-line

b) Double-declining-balance

c) Units-of-production

Which method would result in the lowest net income for Year 2?

a) Double-declining-balance

b) Straight-line

c) Units-of-production

Which method would result in the lowest fixed asset turnover ratio for year 1?

a) Units-of-production

b) Double-declining-balance

c) Straight-line