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Three different companies each purchased trucks on January 1, Year 1, for $80,000. Each truck...

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Accounting

Three different companies each purchased trucks on January 1, Year 1, for $80,000. Each truck was expected to last four years or 250,000 miles. The salvage value was estimated to be $4,000. All three trucks were driven 78,000 miles in Year 1, 55,000 miles in Year 2, 50,000 miles in Year 3, and 70,000 miles in Year 4. Each of the three companies earned $69,000 of cash revenue during each of the four years. Company A uses straight-line depreciation, company B uses double-declining-balance depreciation, and company C uses units-of-production depreciation.

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Net Income a-1 Company A Company B Company C Highest net income a-2 Net Income b-1 Company A Company B Company C b-2 Lowest net income Book Value C-1 Company A Company B Company C Highest book value C-2 Retained Earnings d-1 Company A Company B Company C Highest retained earnings d-2 Lowest cash flow

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