Which method of depreciation, from parts 1-3, would result in the largest net income in the first year for Watkins Production? Explain your reasoning? Which method of depreciation, from part 1-3, would results in the largest net income over the entire 5 years? Explain your reasoning ? Watkins Production purchased a new computerized machine at a cost of $450,000. The machine has a residual value of$64,000 and an expected life of 5 years.1. Using the table I started for you below, calculate the depreciation expense, accumulated depreciation and book value for all 5 yearsof the machine's expected life using the straight-line method depreciationYearDepreciation Expense Accumulated Depreciation01 $2 Ś3 $4 $5 $77,200.00$77,200.00 $77,200.00 $77,200.00 $77,200.00 $Book Value$ 450,000.0077,200.00 $ 372,800.00154,400.00 $295,600.00231,600.00 $218,400.00308,800.00 $141,200.00386,000.00 $ 64,000.00 Watkins Production purchased a new computerized machine at a cost of $450,000. The machine has a residual value of $64,000 and anexpected life of 5 years.1. calculate the depreciation expense, accumulated depreciation and book value for all 5 years of the machine's expected life using the double-declining-balance method of depreciation. For year 4, do not double the depreciation ratio (just use the single declining balance ratio) and foryear 5, use the previous year book value and the known ending residual value to calculate that last year of depreciation expense.YearDepreciation Expense01 $2 $3 $4 $5 $Accumulated Depreciation180,000.00 $108,000.00 $64,800.00 $19,440.00 $13,760.00 $Book Value$450,000.00180,000.00 $270,000.00288,000.00 $162,000.00352,800.00 $ 97,200.00372,240.00 $ 77,760.00386,000.00 $ 64,000.00

Name: Which method of depreciation, from parts 1-3, would result in the larg
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Description: Which method of depreciation, from parts 1-3, would result in the largest net income in the first year for Watkins Production? Explain your reasoning? Which method of depreciation, from part 1-3, would results in the largest net income over the ent

The depreciation expense is a charge against the profit. It decreases the tax liability. The increase in the depreciation expense result in a decrease in the net income and tax liability. Depreciation may be computed using the straight-line method, declining-balance method, or double-declining-balance method.The straight-line method of depreciation would result in the largest net income in the first year for Watkins Production.Explanation: Depreciation expense for the first year is $77,200 whereas under the double-declining method, it is $180,000. The depreciation under the straight-line method is lower than the double-declining method. Hence, it would deduct a lesser amount from revenue to compute the net income. So, the straight-line method of depreciation would result in the largest net income in the first year for Watkins Production.Both methods result in the same net income over the entire 5 years.Explanation: The total depreciation provided over the useful life of the asset remains the same under the straight-line method and double-declining method. Hence, both methods will result in the same net income over the entire 5 years.The straight-line method of depreciation would result in the largest net income in the first year for Watkins Production.Both methods result in the same net income over the entire 5 years.