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?

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Expert Solution

ekkarill92 answered 1 year ago

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