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 units.Required:00:58:551. Complete a depreciation schedule for each of the alternative methods.a. Straight-line.b. Units-of-production.c. Double-declining-balance.eBook2. Which method will result in the highest net income in year 2? Does this higher net income mean the machine was used moreefficiently 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 Units-of-production method. (Do not round intermediate calculations.)IncomeStatementBalance SheetDepreciationExpenseAccumulatedDepreciation Book ValueYearAt acquisition1234Cost〈 Req 1AReq 1C >

Question
Asked Dec 4, 2018
36 views
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:
00:58:55
1. Complete a depreciation schedule for each of the alternative methods.
a. Straight-line.
b. Units-of-production.
c. Double-declining-balance.
eBook
2. 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?
Complete this question by entering your answers in the tabs below.
Req 1A
Req 1B
Req 1C
Req 2A
Req 2B
Complete a depreciation schedule for Units-of-production method. (Do not round intermediate calculations.)
Income
Statement
Balance Sheet
Depreciation
Expense
Accumulated
Depreciation Book Value
Year
At acquisition
1
2
3
4
Cost
〈 Req 1A
Req 1C >
help_outline

Image Transcriptionclose

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: 00:58:55 1. Complete a depreciation schedule for each of the alternative methods. a. Straight-line. b. Units-of-production. c. Double-declining-balance. eBook 2. 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? Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 1C Req 2A Req 2B Complete a depreciation schedule for Units-of-production method. (Do not round intermediate calculations.) Income Statement Balance Sheet Depreciation Expense Accumulated Depreciation Book Value Year At acquisition 1 2 3 4 Cost 〈 Req 1A Req 1C >

fullscreen
check_circle

Expert Answer

Step 1
Cost of Machine 39000 
less: Salvage value 4000 
Depreciable  cost 35000 
Divide: life 20000 
Deprecication cost per uniit1.75 
     
fullscreen
Step 2
Depreciation for :      
YeearUnitsDep rateAnnual dep   
146001.758050    
256001.759800    
346001.758050    
446001.758050    
556001.759800    
 Total dep 43750    
however, Total dep shall not exceed Depreciable cost   
Therefore, Last year depreciation shall be reduced by 8750 (i.e. 43750-35000)
Year-5 Dep = 9800-8750 = 1050     
...
fullscreen

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in

Business

Accounting

Related Accounting Q&A

Find answers to questions asked by student like you
Show more Q&A
add
question_answer

Q: Cost Relationships The following costs are for Optical View Inc., a contact lens manufacturer:   Req...

A: Total Cost of production includes both fixed cost and variable costs. Variable costs are those which...

question_answer

Q: Waterways Corporation is preparing its budget for the coming year, 2020. The first step is to plan f...

A: Once the production units are computed, the raw material purchases in pounds are determined. The pur...

question_answer

Q: what are the differences between the following components of taxable income                   o   De...

A: Difference between the Deductions for AGI and Deductions from AGI: Deductions for AGI are also refer...

question_answer

Q: Many businesses borrow money during periods of increased business activity to finance inventory and ...

A: Calculating the value of interest on the note payable at due date. We have,The value of interest = A...

question_answer

Q: Activity Levels and Cost Drivers Shroeder Machine Shop has the following activities:   Machine oper...

A: Unit level activities means the activities required to be performed each time the product is manufac...

question_answer

Q: Regarding taxpayers having a tough time of volume of tax regulations. What does the concept "substan...

A: Substance over form: It is an accounting concept, which means that the business must record those tr...

question_answer

Q: High Country, Inc., produces and sells many recreational products. The company has just opened a new...

A: 1 (a) Compute the unit product cost using absorption costing: 

question_answer

Q: Required information   [The following information applies to the questions displayed below.]  Doyle ...

A: Accounting equation: Accounting equation is an accounting tool expressed in the form of equation, by...

question_answer

Q: The two independent cases are listed below:    Case A   Case B     Year 2   Year 1   Year 2   Y...

A: Cash flows from operating activities:  Cash flows from operating activities refer to the cash receiv...