Question

Required information CC9-1 Accounting for the Use and Disposal of Long-Lived Assets [LO 9-3, LO 9-5) [The following information applies to the questions displayed below.] Nicole's Getaway Spa (NGS) purchased a hydrotherapy tub system to add to the wellness programs at NGS. The machine was purchased at the beginning of the year at a cost of $16,000. The estimated useful life was five years and the residual value was $1,000. Assume that the estimated productive life of the machine is 10,000 hours. Expected annual production was year 1, 2.400 hours: year 2, 2,300 hours: year 3, 2,200 hours; year 4, 2,100 hours, and year 5, 1,000 hours. CC9-1 Part 1 Required: 1. Complete a depreciation schedule for each of the alternative methods. a. Straight-line. b. Units-of-production. c. Double-declining-balance.

somebody help me with the three methods please, thank you very much

Answer 1

Cost of the Machine Less : Salvage Value Depreciable Value of the Machine Life of the Machine Life of the Equipement (Units) 16000 1000 15000 5 10000 Straight Line Method Annual Depreciation Depreciable Value Life annual Depreciation :15000/5 3000 Depreciation Expenses Accumulated Net Book Value Year Depreciation At Acquisition 16000 13000 1 3000 3000 10000 2 3000 6000 7000 3 3000 9000 3000 12000 4 4000 5 3000 15000 1000 LC

Units of Activity Method Annual Depreciation : Depreciable Value / Life Depreciation Per unit : 15000/10000 1.50 Depreciation Expenses Accumulated Net Book Value Year Depreciation At Acquissition 16000 3600 1 3600 12400 7050 8950 2 3450 3300 10350 3 5650 3150 13500 2500 4 5 15000 1000 1500

Double Declining balance Method Rate of Depreciation = (1/ Life)*2 Depreciation Rate (1/5)*2 40.0% Double Declining balance Method Depreciation Depreciation % Book Value Book value Year 16000 40% 6400 9600 5760 2 9600 40% 3840 3456 5760 40% 2304 3 3456 40% 4 1382 2074 5 52% 2074 1074 1000 Accumulated Depreciation Net Book Value Year Expenses Depreciation At Acquissition 16000 1 6400 6400 9600 10240 5760 2 3840 2304 12544 3456 1382 4 13926 2074 5 15000 1074 1000 L0