accounting-Answer the following questions concerning the choice of depreciation method

QUESTION

5.Answer the following questions concerning the choice of depreciation method for an asset that has a 10-year life. Enter the number corresponding to your answer in the box provided. Answer choices may be used once, more than once, or not at all. Be careful with matching questions because carmen randomizes the matches. Thus, if you print out the quiz to work on it and then enter your answers later in the week, it is very likely the order of the matches will be different. Therefore, exercise caution when entering your answers into carmen. Quiz scores will not be adjusted for errors in entering choices.Question 5 options:123Which depreciation method will show the highest amount of income tax expense in the first year of owning the asset?123Which depreciation method would most likely result in a gain if the asset was sold at the end of the third year of ownership?123Which depreciation method will show the lower book value of the asset at the end of the first year?1.straight-line2.double-declining balance3.unable to determine from the information given8.Mason Company purchased a new machine on January 1, 1999, for $64,000. At the time of acquisition,
the machine was estimated to have a service life of eight years and a residual value of $10,000.
The company uses the double-declining balancemethod of calculating depreciation. The machine was
sold for $39,000 cash on December 31, 2001.
Calculate the amount of the gain recorded on the sale. Enter your answer as a number (i.e., 5,000).
Do not use decimals, put a minus sign in front of your answer, or type the word gain after your answer.9.XYZ Company purchased a new machine on January 1, 2011 and assigned it an 8-year life with a residual value(note the amount of the residual value is intentionally omitted from the problem). Using the straight-linedepreciation method, the book value of the machine at December 31, 2013 was $47,250. Had XYZ Company useddouble-declining balance depreciation, the depreciation expense recorded on the machine in 2012 would havebeen $13,500.Calculate the residual value assigned to the machine. Do not use decimals in your answer.10.On January 1, 2004, ABC Company purchased equipment for $98,000. The equipment was assigned a life of 12 yearsand a residual value of $14,000.On January 1, 2009, ABC Company decided the life of the equipment should be revised from 12 to 15 years.On January 1, 2014, ABC Company spent $50,000 to completely overhaul the equipment. This overhaul caused ABCCompany to change the life of the equipment from 15 years to 19 years with a residual value at the end of the 19years of $3,000.Calculate the book value of the equipmentat December 31, 2015assuming ABC Company employs the straightline depreciation method. Do not use decimals in your answer.

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