Schrade Company bought a machine for $98,000 cash. The estimated useful life was four years and the estimated residual value was $6,040. Assume that the estimated useful life in productive units is 121,000. Units actually produced were 44,000 in Year 1 and 46,000 in Year 2. Required: 1. Determine the appropriate amounts to complete the following schedule. 2-a. Which method would result in the lowest Earnings per Share for Year 1? 2-b. Which method would result in the lowest Earnings per Share for Year 2? 3. If used for tax reporting, which method would result in the highest amount of cash outflows in Year 1?

Schrade Company bought a machine for $98,000 cash. The estimated useful life was four years and the estimated residual value was $6,040. Assume that the estimated useful life in productive units is 121,000. Units actually produced were 44,000 in Year 1 and 46,000 in Year 2. Required: 1. Determine the appropriate amounts to complete the following schedule. 2-a. Which method would result in the lowest Earnings per Share for Year 1? 2-b. Which method would result in the lowest Earnings per Share for Year 2? 3. If used for tax reporting, which method would result in the highest amount of cash outflows in Year 1?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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