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Solar Innovations Corporation bought a machine at the beginning of the year at a cost of $39,000. The estimated useful life was fiveyears and the residual value was $4,000. Assume that the estimated productive life of the machine is 20,000 units. Expected annualproduction was year 1, 4,600 units; year 2, 5,600 units; year 3, 4,600 units; year 4, 4,600 units; and year 5, 600 unitsRequired00-59151. Complete a depreciation schedule for each of the alternative methods.a. Straight-line.b. Units-of-production.c. Double-declining-balance.2. Which method will result in the highest net income in year 2? Does this higher net income mean the machine was used moreeBookefficiently under this depreciation method?Complete this question by entering your answers in the tabs below.Req 1AReq 1BReq 1CReq 2AReq 2BComplete a depreciation schedule for Straight-line method. (Do not round intermediate calculations.)IncomeStatementBalance SheetDepreciationExpenseYearCostDepreciation Bok ValueAt acquisition2345Req 1AReq 1B>

Question
Solar Innovations Corporation bought a machine at the beginning of the year at a cost of $39,000. The estimated useful life was five
years and the residual value was $4,000. Assume that the estimated productive life of the machine is 20,000 units. Expected annual
production was year 1, 4,600 units; year 2, 5,600 units; year 3, 4,600 units; year 4, 4,600 units; and year 5, 600 units
Required
00-59151. Complete a depreciation schedule for each of the alternative methods.
a. Straight-line.
b. Units-of-production.
c. Double-declining-balance.
2. Which method will result in the highest net income in year 2? Does this higher net income mean the machine was used more
eBook
efficiently under this depreciation method?
Complete this question by entering your answers in the tabs below.
Req 1AReq 1B
Req 1C
Req 2AReq 2B
Complete a depreciation schedule for Straight-line method. (Do not round intermediate calculations.)
Income
Statement
Balance Sheet
Depreciation
Expense
Year
Cost
Depreciation Bok Value
At acquisition
2
3
4
5
Req 1A
Req 1B>
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Solar Innovations Corporation bought a machine at the beginning of the year at a cost of $39,000. The estimated useful life was five years and the residual value was $4,000. Assume that the estimated productive life of the machine is 20,000 units. Expected annual production was year 1, 4,600 units; year 2, 5,600 units; year 3, 4,600 units; year 4, 4,600 units; and year 5, 600 units Required 00-59151. Complete a depreciation schedule for each of the alternative methods. a. Straight-line. b. Units-of-production. c. Double-declining-balance. 2. Which method will result in the highest net income in year 2? Does this higher net income mean the machine was used more eBook efficiently under this depreciation method? Complete this question by entering your answers in the tabs below. Req 1AReq 1B Req 1C Req 2AReq 2B Complete a depreciation schedule for Straight-line method. (Do not round intermediate calculations.) Income Statement Balance Sheet Depreciation Expense Year Cost Depreciation Bok Value At acquisition 2 3 4 5 Req 1A Req 1B>

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check_circleAnswer
Step 1

The Depreciation under SLM basis has been computed as under:

Cost of Machine 39000   
Less: Salvage Value 4000   
Depreciable ccost 35000   
Divide: Life 5   
Annual Depreciation 7000   
       
Schedule for Dep under SLM:    
 Income StatementBalance Sheet  
YearDepreciation expenseCostAcc. DepBook Value
At Acquisition 39000039000 
17000 39000700032000 
27000 390001400025000 
37000 390002100018000 
47000 390002800011000 
57000 39000350004000 
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Step 2
Depreciation under Units of Production:         
             
Cost of Machine 39000         
Less: Salvage Value 4000         
Depreciable ccost 35000         
Divide: Life 20000units        
Depreciation per unit1.75         
             
YearUnitsDep rateDep expense        
146001.758050         
256001.759800         
346001.758050         
446001.758050         
556001.751050(9800-8750)       
Here the Total Dep is $ 43750 but the depreciabble cost is $ 35000. Therefore, $ 8750 shall be needed to be adjusted in Last year depreciation
             
Schedule for Dep under UOP:          
 Income StatementBalance Sheet        
YearDepreciation expenseCostAcc. DepBook Value      
At Acquisition 39000039000       
18050 39000805030950       
29800 390001785021150       
38050 390002590013100       
48050 39000339505050       
51050 39000350004000       
             
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Step 3
Depreciation under DDB:         
            
Rate of Dep under SLM (100/5) : 20%        
Rate of Dep under DDB (20% *2 ) = 40%        
            
Schedule for Dep under DDB:         
 Income StatementBalance Sheet       
YearDepreciation expenseCostAcc. DepBook Value     
At Acquisition 39000039000      
115600 390001560023400      
29360 390002496014040      
35616 39000305768424      
43370 39000339465054      
51054 39000350004000      
 ($2022 but restricted to $1054)        
Note: The last year dep underr DDB is $ 2022 (i.e. 5054*40%) however, it will exceed the total ddep from epreciable cost.
hence, the last year depreciation has to be adjusted for keeping the...
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