Reference no: EM132647378

Question - Three different companies each purchased trucks on January 1, 2018, for $62,000. Each truck was expected to last four years or 250,000 miles. Salvage value was estimated to be $2,000. All three trucks were driven 80,000 miles in 2018, 55,000 miles in 2019, 51,000 miles in 2020, and 70,000 miles in 2021. Each of the three companies earned $53,000 of cash revenue during each of the four years. Company A uses straight-line depreciation, company B uses double-declining-balance depreciation, and company C uses units-of-production depreciation.

Answer each of the following questions. Ignore the effects of income taxes.

a-1. Calculate the net income for 2018?

1. Calculate the net income for 2021?

2. Calculate the book value on the December 31, 2020, balance sheet?

Calculate the retained earnings on the December 31, 2021, balance sheet?

1. Which company will report the highest amount of retained earnings on the December 31, 2021, balance sheet?

2. Which company will report the lowest amount of cash flow from operating activities on the 2020 statement of cash flows?