Solar Innovations Corporation bought a machine at the beginning of the year at a cost of $ 22,000. The estimated useful life was five years and the residual value was $ 2,000. Assume that the estimated productive life of the machine is 10,000 units. Expected annual production was year 1, 2,000 units; year 2, 3,000 units; year 3, 2,000 units; year 4, 2,000 units; and year 5, 1,000 units.
1. Complete a depreciation schedule for each of the alternative methods. Round answers to the nearest dollar.
a. Straight- line.
b. Units- of- production.
c. Double- declining- balance.
2. Which method will result in the highest net income in year 2? Does this higher net income mean the machine was used more efficiently under this depreciation method?

  • CreatedNovember 02, 2015
  • Files Included
Post your question