Question

10 ng Objective 2 $33.000. The cou Req 1. Clining-balance, 9. Exp. $8,250 E10-20 Computing depreciation-three methods Crispy Fried Chicken bought equipment on January 2, 2018, for $33 ment was expected to remain in service for four years and to opera At the end of the equipment's useful life, Crispy's estimates that its be $6,000. The equipment operated for 675 hours the first year, 2.025 ond year, 2,700 hours the third year, and 1,350 hours the fourth to operate for 6,750 hore that its residual value ar, 2,025 hours the sec

Answer 1

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Crispy Fried			Straight Line Table	Cost/Opening Book Value	Depreciation Expense	Accumulated depreciation	Net Book Value
Cost of Equipment	33,000.00	A	Year 0	33,000.00	-	-	33,000.00
Residual Value	6,000.00	B	Year 1	33,000.00	6,750.00	6,750.00	26,250.00
Depreciable Value	27,000.00	C=A-B	Year 2	26,250.00	6,750.00	13,500.00	19,500.00
			Year 3	19,500.00	6,750.00	20,250.00	12,750.00
Straight Line Method			Year 4	12,750.00	6,750.00	27,000.00	6,000.00
Depreciable Value	27,000.00	See C	Total		27,000.00
Life	4.00	D
Annual depreciation	6,750.00	E=C/D
Units of Production Method			Table	Cost/Opening Book Value	Depreciation Expense	Accumulated depreciation	Net Book Value
Depreciable Value	27,000.00	See C	Year 0	33,000.00	-	-	33,000.00
Life (Units)	6,750.00	F	Year 1	33,000.00	2,700.00	2,700.00	30,300.00
Depreciation per unit	4.00	G=C/F	Year 2	30,300.00	8,100.00	10,800.00	22,200.00
	H	I=H*G	Year 3	22,200.00	10,800.00	21,600.00	11,400.00
	Production	Depreciation	Year 4	11,400.00	5,400.00	27,000.00	6,000.00
Year 1	675.00	2,700.00	Total		27,000.00
Year 2	2,025.00	8,100.00
Year 3	2,700.00	10,800.00
Year 4	1,350.00	5,400.00
Total	6,750.00	27,000.00
				M	N=M*L
Double Declining Method			Table	Cost/Opening Book Value	Depreciation Expense	Accumulated depreciation	Net Book Value
Cost of Equipment	33,000.00	See A	Year 0	33,000.00	-	-	33,000.00
Life	4.00	See D	Year 1	33,000.00	16,500.00	16,500.00	16,500.00
Annual depreciation	8,250.00	J=A/D	Year 2	16,500.00	8,250.00	24,750.00	8,250.00
Depreciation rate	25.00%	K=J/A	Year 3	8,250.00	4,125.00	28,875.00	4,125.00
Double Depreciation %	50.00%	L=K*2	Year 4	4,125.00	2,062.50	30,937.50	2,062.50
			Total		30,937.50
Answer 2
Double Declining Method is it follows the concept that machines gives better service in initial years so deprecation should be more in initial years and breakdowns are more in later years so deprecation should be less in later years.
Double Declining Method tracks wear and tear on the equipment most closely.