At the beginning of the year, Palermo Brothers, Inc., purchased a new plastic water bottle making machine at a cost of $45,000. The estimated residual value was $5,000. Assume that the estimated use¬ful life was four years and the estimated productive life of the machine was 400,000 units. Actual annual production was as follows:

Year Units

1..................... 12,000

2..................... 90,000

3..................... 110,000

4..................... 80,000

Required:

1. Complete a separate depreciation schedule for each of the alternative methods. Round your answers to the nearest dollar.

a. Straight-line.

b. Units-of-production.

c. Double-declining-balance

2. Assuming that the machine was used directly in the production of one of the products that the company manufactures and sells, what factors might management consider in selecting a preferable depreciation method in conformity with the expense principle?

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Method: Depreciation Accumulated Depreciation Net Book Value Year Computation Expense At acquisition