Solar Innovations Corporation bought a machine at the beginning of the year at a cost of...

Solar Innovations Corporation bought a machine at the beginning of the year at a cost of $32,000. 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 was year 1, 2,100 units; year 2, 3,100 units; year 3, 2,100 units; year 4, 2,100 units; and year 5, 600 units.

Required:

Complete a depreciation schedule for each of the alternative methods.
a. Straight-line.
b. Units-of-production.
c. Double-declining-balance.

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?

Expert Solution

ekkarill92 answered 2 years ago

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