Plastic Works Corporation bought a machine at the beginning of the year at a cost...
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Plastic Works Corporation bought a machine at the beginning of the year at a cost of $17,250. The estimated useful life was five years, and the residual value was $2,750. Assume that the estimated productive life of the machine is 14,500 units. Expected annual production was: year 1, 4,500 units; year 2, 4,500 units; year 3, 2,750 units; year 4, 1,450 units; and year 5, 1,300 units. Required: 1. Complete a depreciation schedule for each of the alternative methods. (Enter all values as positive amount.) a. Straight-line. Balance Sheet Income Statement Depreciation Expense Year Cost Accumulated Depreciation Book Value At acquisition $ 17,250 1 2 3 4 5 b. Units-of-production. Balance Sheet Income Statement Depreciation Expense Year Cost Accumulated Depreciation Book Value At acquisition 1 2 3 4 5 c. Double-declining-balance. Income Statement Balance Sheet Year Depreciation Expense Cost Accumulated Depreciation Book Value At acquisition 1 2 3 4 2-a. Which method will result in the highest net income in year 2? Straight-line Units-of-production Double-declining-balance 2-b. Does this higher net income mean the machine was used more efficiently under this depreciation method? No Yes
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