Question

In: Accounting

SouthernSouthern Fried Chicken bought equipment on January 22?,2016?, for $ 42,000. The equipment was expected to...

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

Depreciation for the Year

Asset

Depreciable

Depreciation

Depreciation

Accumulated

Book

Date

Cost

Cost

Rate

Expense

Depreciation

Value

1-2-2016

12-31-2016

/

=

12-31-2017

/

=

12-31-2018

/

=

12-31-2019

/

=

Before completing the? units-of-production depreciation? schedule, calculate the depreciation expense per unit.

(

-

) /

=

Depreciation per unit

(

-

) /

=

Prepare a depreciation schedule using the? units-of-production method.

Units-of-Production Depreciation Schedule

Depreciation for the Year

Asset

Depreciation

Number of

Depreciation

Accumulated

Book

Date

Cost

Per Unit

Units

Expense

Depreciation

Value

1-2-2016

12-31-2016

x

=

12-31-2017

x

=

12-31-2018

x

=

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

Depreciation for the Year

Asset

Book

DDB

Depreciation

Accumulated

Book

Date

Cost

Value

Rate

Expense

Depreciation

Value

1-2-2016

12-31-2016

x

=

12-31-2017

x

=

12-31-2018

=

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.

Solutions

Expert Solution


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