Solve the following: Solar Innovations Corporation bought a machine at the begin

Question

Solve the following:

Solar Innovations Corporation bought a machine at the beginning of the year at a cost of $41,000. The estimated useful life was five years and the residual value was $4.000. Assume that the estimated productive life of the machine is 10,000 units Expected annual production for year 1, 2,000 units, year 2 3,000 units, year 3, 2,000 units, year 4, 2.000 units, and year 5. 1.000 units Required 1. Complete a depreciation schedule for each of the alternative methods. (Do not round intermediate calculations.) a. Straight-line. Income Statement Balance Sheet Year Depreciation Accumulated Book Value Cost xpense Depreciation At acquisition S 7,400$ 41,000 $7400 14,800 22.200 29,600 37,000 7.400 7,400 7,400 7,400 41,000 1,000 41,000 41,000 S 41,000 33,600 26,200 18,800 11.400 4.000 b Units-of-production Balance Sheet Statement Depreciation xpense Accumulated Book Value Depreciation Year At acquisition

Explanation / Answer

Year Depreciation exp a Cost Accumulated dep b Book value At acquisition $41,000 1 $7,400 $41,000 $7,400 $33,600 2 $7,400 $41,000 $14,800 $26,200 3 $7,400 $41,000 $22,200 $18,800 4 $7,400 $41,000 $29,600 $11,400 5 $7,400 $41,000 $37,000 $4,000 slm DEP (41000-4000)/5 7400 ANS B Year Depreciation exp a Cost Accumulated dep b Book value At acquisition $41,000 1 $7,400 $41,000 $7,400 $33,600 2 $11,100 $41,000 $18,500 $22,500 3 $7,400 $41,000 $25,900 $15,100 4 $7,400 $41,000 $33,300 $7,700 5 $3,700 $41,000 $37,000 $4,000 Unit of prouction Dep rate (41000-4000)/10000 3.70 Units Dep rate Dep exp 2000 3.70 7400 3000 3.70 11100 2000 3.70 7400 2000 3.70 7400 1000 3.70 3700 ans c Year Depreciation exp a Cost Accumulated dep b Book value At acquisition $41,000 1 $16,400 $41,000 $16,400 $24,600 2 $9,840 $41,000 $26,240 $14,760 3 $5,904 $41,000 $32,144 $8,856 4 $3,542 $41,000 $35,686 $5,314 5 $1,314 $41,000 $37,000 $4,000 DDB rate 1/5*200% 0.4 (41000-4000)/10000 3.70 Beg book value Dep rate Dep exp Ending book value 41000 40% 16400 24600 24600 40% 9840 14760 14760 40% 5904 8856 8856 40% 3542 5314 5314 40% 1314 4000 (5314-4000) Highest net income in year 2 is the method which gives least dep exp Straight Line method No. it is just one of the method of depreciation If ny doubt please comment

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