Veto Company bought equipment on January 1, 2020, for $135,000. The expected life is 10 years, and the residual value is $15,000. Based on three acceptable depreciation methods, the annual depreciation expense and balance of accumulated depreciation at the end of 2020 and 2021 are shown below. Case A Case B Case C Annual Accumulated Annual Accumulated Annual Accumulated Year Expense Amount Expense Amount Expense Amount 2020 $27,000 $27,000 $12,000 $12,000 $21,819 $21,819 2021 21,600 48,600 12,000 24,000 19,635 41,454 Required a. Identify the depreciation method used in each case A, B, and C. b. Based on the answer to part a, prepare a depreciation schedule that shows annual depreciation expense and year-end accumulated depreciation and book value over the life of the asset for each case A, B, and C. c. Which method results in the highest net income in year 1? d. Which method results in the highest net income in year 10? Identification of Method Case A Depreciation Schedule Case B Depreciation Schedule Case C Depreciation Schedule Analysis b. Based on the answer to part a, prepare a depreciation schedule that shows annual depreciation expense and year-end accumulated depreciation and book value over the life of the asset for each case A, B, and C. Note: Carry all decimals in calculations; round the final answers in the table below to the nearest dollar. Case C: For the Period End of Period Reporting Depreciation Accumulated Book Period Expense Depreciation Value Jan 1, 2020 Dec 31, 2020 $ Dec 31, 2021 Dec 31, 2022 Dec 31, 2023 Dec 31, 2024 Dec 31, 2025 Dec 31, 2026 Dec. 31, 2027 Dec. 31, 2028 Dec 31, 2029 Check Identifying Depreciation Methods and Preparing Schedules Veto Company bought equipment on January 1, 2020, for $135,000. The expected life is 10 years, and the residual value is $15,000. Based on three acceptable depreciation methods, the annual depreciation expense and balance of accumulated depreciation at the end of 2020 and 2021 are shown below. Case A Case B Case C Annual Accumulated Annual Accumulated Annual Accumulated Year Expense Amount Expense Amount Expense Amount 2020 $27,000 $27.000 $12,000 $12,000 $21,819 $21,819 2021 21,600 48,600 12,000 24,000 19,635 41,454 Required a. Identify the depreciation method used in each case A, B, and C. b. Based on the answer to part a prepare a depreciation schedule that shows annual depreciation expense and year-end accumulated depreciation and book value over the life of the asset for each case A, B, and C. C. Which method results in the highest net income in year 1? d. Which method results in the highest net income in year 10? Identification of Method Case A Depreciation Schedule Case B Depreciation Schedule Case C Depreciation Schedule Analysis c. Which method results in the highest net income in year 1? d. Which method results in the highest net income in year 107 Check
