Question
Torge Company bought a machine for $91,000 cash. The estimated useful life was five years and the estimated residual value was $4,000. Assume that the
Torge Company bought a machine for $91,000 cash. The estimated useful life was five years and the estimated residual value was $4,000. Assume that the estimated useful life in productive units is 195,000. Units actually produced were 52,000 in year 1 and 58,500 in year 2.
Required:
Determine the appropriate amounts to complete the following schedule. (Do not round intermediate calculations.)
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
1. 2-a. Which method would result in the lowest net income for year 1?
1. 2-b. Which method would result in the lowest net income for year 2?
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