Assume Organic Ice Cream Company, Inc., bought a new ice cream production kit (pasteurizer/homogenizer, cooler, aging vat, freezer, and filling machine) at the beginning of the year at a cost of $20,000. The estimated useful life was four years, and the residual value was $2,180. Assume that the estimated productive life of the machine was 9.900 hours. Actual annual usage was 3,960 hours in Year 1: 2,970 hours in Year 2: 1,980 hours in Year 3; and 990 hours in Year 4. Required: 1. Complete a separate depreciation schedule for each of the alternative methods. a. Straight-line. b. Units-of-production. c. Double-declining-balance. Complete this question by entering your answers in the tabs below. Reg 1A Req 18 Req 1C Complete a depreciation schedule using the Straight-line method. (Do not round intermediate calculations.) Net Depreciation Accumulated Expense Depreciation Book Value Year At acquisition 1 2 3 4
Assume Organic Ice Cream Company, Inc., bought a new ice cream production kit (pasteurizer/homogenizer, cooler, aging vat, freezer, and filling machine) at the beginning of the year at a cost of $20,000. The estimated useful life was four years, and the residual value was $2,180. Assume that the estimated productive life of the machine was 9.900 hours. Actual annual usage was 3,960 hours in Year 1: 2,970 hours in Year 2: 1,980 hours in Year 3; and 990 hours in Year 4. Required: 1. Complete a separate depreciation schedule for each of the alternative methods. a. Straight-line. b. Units-of-production. c. Double-declining-balance. Complete this question by entering your answers in the tabs below. Reg 1A Req 18 Req 1C Complete a depreciation schedule using the Straight-line method. (Do not round intermediate calculations.) Net Depreciation Accumulated Expense Depreciation Book Value Year At acquisition 1 2 3 4
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:Assume Organic Ice Cream Company, Inc., bought a new ice cream production kit (pasteurizer/homogenizer, cooler, aging vat, freezer,
and filling machine) at the beginning of the year at a cost of $20,000. The estimated useful life was four years, and the residual value
was $2,180. Assume that the estimated productive life of the machine was 9.900 hours. Actual annual usage was 3,960 hours in Year 1:
2,970 hours in Year 2: 1,980 hours in Year 3; and 990 hours in Year 4.
Required:
1. Complete a separate depreciation schedule for each of the alternative methods.
a. Straight-line.
b. Units-of-production.
c. Double-declining-balance.
Complete this question by entering your answers in the tabs below.
Req 1A
Req 18
Req 1C
Complete a depreciation schedule using the Straight-line method. (Do not round intermediate calculations.)
Net
Depreciation Accumulated
Expense
Depreciation
Book Value
Year
At acquisition
1
2
3
4
Req 1A
Req 1B >
Transcribed Image Text:Req 1A
Year
At acquisition
1
2
3
4
Req 1B
Complete a depreciation schedule using the units-of-production method. (Use two decimal places for the per unit output
factor. Do not round intermediate calculations.)
Req 1C
Year
At acquisition
1
2
3
4
Depreciation Accumulated
Expense
Show Transcribed Text
Net
Depreciation Book Value
Req 1B
< Req 1A
Req 1C
Req 1A
Complete a depreciation schedule using the double-declining-balance method. (Do not round intermediate calculations.)
Depreciation Accumulated
Expense Depreciation
Net
Book Value
3
< Req 1B
Req 1C >
Ĉ
Req 1C >
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