Question

Tails Corporation purchased and installed electronic payment equipment at its drive-in restaurants in San Marcos, TX, at a cost of $51,300. The equipment has an estimated residual value of $2,700. The equipment is expected to process 275,000 payments over its three-year useful life. Per year, expected payment transactions are 66,000, year 1; 151,250, year 2; and 57,750, year 3 Required: Complete a depreciation schedule for each of the alternative methods. (Do not round intermed iate calculations.) 1. Straight-line Income Statement Balance Sheet Accumulated Depreciation Expense Year Cost Book Value Depreciation At acquisition 1 2 3 2. Units-of-production. Income Balance Sheet Statement Accumulated Depreciation Expense Cost Year Book Value Depreciation At acquisition 11,664 1 26,730 2 10,206 3. Double-declining-balance. Income Statement Balance Sheet ot:; Denreciation.

Answer 1

Straight Line
Date	Cost of asset	Depreciable cost	Useful life	Depreciation expenses	Accumulated Depreciation	Book value
Year 1	$51,300	$48,600	3 Years	$16,200	$16,200	$35,100
Year 2	$51,300	$48,600	3 Years	$16,200	$32,400	$18,900
Year 3	$51,300	$48,600	3 Years	$16,200	$48,600	$2,700
Units of production
Date	Cost of asset	Depreciation per unit	No. of units	Depreciation expenses	Accumulated Depreciation	Book value
Year 1	$51,300	$0.18	66000	$11,664	$11,664	$39,636
Year 2	$51,300	$0.18	151250	$26,730	$38,394	$12,906
Year 3	$51,300	$0.18	57750	$10,206	$48,600	$2,700
Double Declining balance
Date	Cost of asset	Book Value	DDB Rate	Depreciation expenses	Accumulated Depreciation	Book value
Year 1	$51,300	$51,300	66.67%	$34,202	$34,202	$17,098
Year 2	$51,300	$17,098	66.67%	$11,399	$45,601	$5,699
Year 3	$51,300	$5,699	66.67%	$3,799	$49,401	$1,899