You are a financial analyst for Ford Motor Company and have been asked to determine the impact of alternative depreciation methods. For your analysis, you have been asked to compare methods based on a machine that cost $176,000. The estimated useful life is 10 years, and the estimated residual value is $33,440. The machine has an estimated useful life in productive output of 216,000 units. Actual output was 28,000 in year 1 and 24,000 in year 2.
1. For years 1 and 2 only, prepare separate depreciation schedules assuming:
(a) Straight-line method.
(b) Units-of-production method.
(c) Double-declining-balance method.