Torge Company bought a machine for $82,000 cash. The estimated useful life was five years and the estimated residual value was $7,000. Assume that the estimated useful life in productive units is 171,000. Units actually produced were 45,600 in year 1 and 51,300 in year 2.

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

2-a. Which method would result in the lowest net income for year 1?

• Straight-line

• Double-declining-balance

• Units-of-production

2-b. Which method would result in the lowest net income for year 2?

• Units-of-production

• Double-declining-balance

• Straight-line

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

• Units-of-production

• Double-declining-balance

• Straight-line