QUALITATIVE ANALYSIS: It is advisable to document all your work and calculations as applicable.

1) Canada Star Sales & Service acquired a new machine that cost $42,000 in early 2019. The machine is expected to have a five-year useful life and is estimated to have a salvage value of $7,000 at the end of its life. (Round your final answers to the nearest dollar).

(a) Using the straight-line depreciation method, calculate the depreciation expense to be recognized in the second year of the machine's life and calculate the accumulated depreciation after the third year of the machine's life.

(b) Using the double-declining balance depreciation method, calculate the depreciation expense for the third year of the machine's life and the net book value of the machine at this point in time.

2) During the year, the cost of goods sold was $320,000; income from operations was $304,000; income tax expense was $64,000; interest expense was $48,000; and selling, general, and administrative expenses were $176,000.