1. Problem 6-24A (Algo) Determining the effect of depreciation expense on financial statements
LO 6-2, 6 3 , 6 4 Three different companies each purchased trucks on January 1. Year 1, for $76
, 000 . Each truck was expected to last four years on 250,000 miles. Salvage value was estimated
to be $6 , 000 . All three trucks were driven 81,000 miles in Year 1, 55,000 miles in Year 2.
46.000 miles in Year 3 , and 71,000 miles in Year 4 . Each of the three companies eatned $65 ,
000 of cash rovenue during each of the four years Company A uses straight Line depreciation,
company B uses double-decining balance depreciation, and compary C uses units of production
depreciation Answer each of the following questions. Ignore the effects of income taxes.
Required a-1. Calculate the net income for Year 1 a-2. Which company will report the highest
amount of net income for Year 1 ? b.1. Colculate the net income for Year 4 b-2. Which company
will repont the lowest amount of net income for Year 4 ? c-1. Colculate the book value on the
December 31, Year 3 , batance sheet c-2. Which company will report the highest book value on
the December 31 , Year 3 , balance sheet? d-1. Calculate the retained earnings on the December
31 , Year 4 , balance sheet. d.2. Which company will report the highest amount of retained
earrings on the December 31, Year 4. balance sheet? e. Which company will report the lowest
amount of cash fow from operating activites on the Year 3 statement of cash flows? Complete
this question by entering your answers in the tabs below. a-1. Calculate the net income for Year
1. (Round "Per Unit Cost 2 to 3 decimal places.) a-2. Which company will report the highest
amount of net income for Year 1 ? a-1. Calculate the net income for Year 1 a-2. Which company
will report the highest amount of net income for Year 1 ? b-1. Calculate the net income for Year
4 b-2. Which company will report the lowest amount of net income for Year 4 ? c-1. Calculate
the book value on the December 31, Year 3, balance sheet. c-2. Which company will report the
highest book value on the December 31, Year 3, balance sheet? d-1. Calculate the retained
earnings on the December 31, Year 4, balance sheet. d-2. Which company will report the highest
amount of retained earnings on the December 31, Year 4, balance she e. Which company will
report the lowest amount of cash flow from operating activities on the Year 3 statement of
Complete this question by entering your answers in the tabs below. a-1. Calculate the net income
for Year 1. (Round "Per Unit Cost" to 3 decimal places.) a-2. Which company will report the
highest amount of net income for Year 1 ? a-2. Which company will report the highest amount of
net income for Year 1 ? b-1. Calculate the net income for Year 4 b-2. Which company will report
the lowest amount of net income for Year 4 ? c-1. Calculate the book value on the December 31,
Year 3, balance sheet. c-2. Which company will report the highest book value on the December
31, Year 3, balance sheet? d-1. Calculate the retained eamings on the December 31, Year 4 ,
balance sheet. d-2. Which company will report the highest ampunt of retained earnings on the
Decernber 31 , Year 4 , balance shee e. Which company will report the lowest amount of cash
flow from operating activities on the Year 3 statement of ca Complete this question by entering
your answers in the tabs below. b-1. Calculate the net income for Year 4. (Round your "Per Unit
Cost" to 3 decimal places.) b-2. Which company will report the lowest amount of net income for
Year 4 ? a-1. Calculate the net income for Year 1 a-2. Which company will report the highest
amount of net income for Year 1 ? b-1. Calculate the net income for Year 4 b-2. Which company
will report the lowest amount of net income for Year 4? c-1. Calculate the book value on the
December 31, Year 3, balance sheet c-2. Which company will repont the highest book value on
the December 31. Year 3, balance sheet? d-1. Calculate the retained earnings on the December
31. Year 4 , balance sheet d.2. Which company will report the highest amount of retained
earnings on the December 31, Year 4, balance sheet? e. Which company will report the lowest
amount of cash flow from operating activities on the Year 3 statement of cash flows? Complete

2. this question by entering your answers in the tabs below. c-1. Calculate the book value on the
December 31, Year 3, balance sheet. (Round "Per Unit Cost" to 3 decimal places.) c 2 . Which
company will report the highest book value on the December 31 , Year 3 , balance sheet?