Which method would result in the lowest earnings per share

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Question - Schrade Company bought a machine for $70,500 cash. The estimated useful life was five years, and the estimated residual value was $5,100. Assume that the estimated useful life is 109,000 units. Units actually produced were 45,050 in year 1 and 42.050 in year 2.

Required -

1. Determine the appropriate amounts to complete the following schedule.

2. Which method would result in the lowest earnings per share for year 1? For year 2?

3. Which method would result in the highest amount of cash outflows in year 1?

4. Indicate the effects of (a) acquiring the machine and (b) recording annual depreciation on the operating and investing activities on the statement of cash flows for year 1. Assume that straight-line depreciation is used.

Reference no: EM133130183

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