Reference no: EM132567943

Question - PlasticWorks Corporation bought a machine at the beginning of the year at a cost of $26,700. The estimated useful life was ?ve years, and the residual value was $4,100. Assume that the estimated productive life of the machine is 22,600 units. Expected annual production was: year 1, 7,200 units; year 2, 7,200 units; year 3, 4,100 units; year 4, 2,260 units; and year5, 1,840 units.

Required -

1. Complete a depreciation schedule for each of the alternative methods.

a. Straight-line.

b. Units-of-production.

c. Double-declining-balance.

2-a. Which method will result in the highest net income in year 2?

Units-of-production

Double-declining-balance

Straight-line

2-b. Does this higher net income mean the machine was used more ef?ciently under this depreciation method? Yes or No