In: Accounting
SouthernSouthern
Fried Chicken bought equipment on
January
22?,2016?,
for
$ 42,000.
The equipment was expected to remain in service for four years and to perform
9,000
fry jobs. At the end of the? equipment's useful? life,
SouthernSouthern
estimates that its residual value will be
$6,000.
The equipment performed
900
jobs the first?year,
2,700
the second? year,
3,600
the third? year, and
1,800
the fourth year.
Requirements
1. |
Prepare a schedule of depreciation? expense, accumulated? depreciation, and book value per year for the equipment under the three depreciation methods. Show your computations. ?Note: Three depreciation schedules must be prepared. |
2. |
Which method tracks the wear and tear on the equipment most? closely? |
Requirement 1. Prepare a schedule of depreciation? expense, accumulated? depreciation, and book value per year for the equipment under the three depreciation methods. Show your computations. ?Note: Three depreciation schedules must be prepared.
Begin by preparing a depreciation schedule using the? straight-line method.
Straight-Line Depreciation Schedule |
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Depreciation for the Year |
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Asset |
Depreciable |
Depreciation |
Depreciation |
Accumulated |
Book |
|||
Date |
Cost |
Cost |
Rate |
Expense |
Depreciation |
Value |
||
1-2-2016 |
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12-31-2016 |
/ |
= |
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12-31-2017 |
/ |
= |
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12-31-2018 |
/ |
= |
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12-31-2019 |
/ |
= |
Before completing the? units-of-production depreciation? schedule, calculate the depreciation expense per unit.
( |
- |
) / |
= |
Depreciation per unit |
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( |
- |
) / |
= |
Prepare a depreciation schedule using the? units-of-production method.
Units-of-Production Depreciation Schedule |
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Depreciation for the Year |
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Asset |
Depreciation |
Number of |
Depreciation |
Accumulated |
Book |
|||
Date |
Cost |
Per Unit |
Units |
Expense |
Depreciation |
Value |
||
1-2-2016 |
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12-31-2016 |
x |
= |
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12-31-2017 |
x |
= |
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12-31-2018 |
x |
= |
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12-31-2019 |
x |
= |
Prepare a depreciation schedule using the? double-declining-balance (DDB) method. ?(Enter a? "0" for any items with a zero? value.)
Double-Declining-Balance Depreciation Schedule |
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Depreciation for the Year |
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Asset |
Book |
DDB |
Depreciation |
Accumulated |
Book |
|||
Date |
Cost |
Value |
Rate |
Expense |
Depreciation |
Value |
||
1-2-2016 |
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12-31-2016 |
x |
= |
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12-31-2017 |
x |
= |
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12-31-2018 |
= |
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12-31-2019 |
= |
Requirement 2. Which method tracks the wear and tear on the equipment most? closely?
The
?
method tracks wear and tear most closely.
Choose from any list or enter any number in the input fields and then continue to the next question.