Problem I - worth 10 points On January 1, 2017, Rose Company, purchased new equipment to produces widgets. Cost of equipment $ 1,260,000 Estimated useful life in years 5 Estimated salvage value 60,000 Estimated widgets to be produced in first year 12,000 Due to demand, production of widgets will decrease by 1,000 units/year until the equipment is completely depreciated. 1,000 7 The following depreciation methods may be used: (1) Straight-line (2) Double-declining balance (3) Sum-of-years'-digits (4) Units-of-output Required: Points 1) Compute depreciation using the following methods: a) Straight line b) Double declining balance c) Sum of the Years digits, and d) Units of Production. a) Straight-line 1 b) Double-declining balance 2 c) Sum-of-years'-digits 2 d) Units-of-output 1 2) Select the depreciation method that would result in the highest net income on an Income Statement dated: For the 3-years ending 12/31/19. Highlight your answer . 1 a) Straight line b) Double declining balance c) Sum of the years digist d) Units of production 3) Using the depreciartion method selected in #2 above, prepare T-Accounts for Depreciation Expense, Accumulated Depreciaition, and Income Summary. Include the ending balance of all T-Accounts assuming closing entries are made at the end of each year. 2 Depreciation Expense Accumulated Depreciation Income Summary 4) Prepare a written note to a client explaining why you chose the depreciation selected in #2 above. 1 Total possible points = 10