At the beginning of Year 1, Copeland Drugstore purchased a new computer system for $170,000. It is expected to have a five-year life and a $30,000 salvage value. Required a. Compute the depreciation for each of the five years, assuming that the company uses (1) Straight-line depreciation. (2) Double-declining-balance depreciation. b. Record the purchase of the computer system and the depreciation expense for the first year under straight-line and double- declining-balance methods in a financial statements model. Complete this question by entering your answers in the tabs below. Req A1 Req A2 Record the of the computer system and the depreciation expense for the first year under straight-line and double-declining- balance methods in a financial statements model. (In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA). If an element is not affected by the event, leave the cell blank. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells will require entry.) Assets Balance Sheet Cash + Book Value of = Computer System Purchase of computer system Req B Straight-Line Depreciation COPELAND DRUGSTORE Horizontal Statements Model Stockholders' Equity Retained Earnings Double-Declining-Balance Depreciation Revenue Income Statement - Expenses = < Req A2 Net Income Statement of Cash Flows Req B > Show less A
At the beginning of Year 1, Copeland Drugstore purchased a new computer system for $170,000. It is expected to have a five-year life and a $30,000 salvage value. Required a. Compute the depreciation for each of the five years, assuming that the company uses (1) Straight-line depreciation. (2) Double-declining-balance depreciation. b. Record the purchase of the computer system and the depreciation expense for the first year under straight-line and double- declining-balance methods in a financial statements model. Complete this question by entering your answers in the tabs below. Req A1 Req A2 Record the of the computer system and the depreciation expense for the first year under straight-line and double-declining- balance methods in a financial statements model. (In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA). If an element is not affected by the event, leave the cell blank. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells will require entry.) Assets Balance Sheet Cash + Book Value of = Computer System Purchase of computer system Req B Straight-Line Depreciation COPELAND DRUGSTORE Horizontal Statements Model Stockholders' Equity Retained Earnings Double-Declining-Balance Depreciation Revenue Income Statement - Expenses = < Req A2 Net Income Statement of Cash Flows Req B > Show less A
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
A-7
![At the beginning of Year 1, Copeland Drugstore purchased a new computer system for $170,000. It is expected to have a five-year life
and a $30,000 salvage value.
Required
a. Compute the depreciation for each of the five years, assuming that the company uses
(1) Straight-line depreciation.
(2) Double-declining-balance depreciation.
b. Record the purchase of the computer system and the depreciation expense for the first year under straight-line and double-
declining-balance methods in a financial statements model.
Complete this question by entering your answers in the tabs below.
Req A1
Record the purchase of the computer system and the depreciation expense for the first year under straight-line and double-declining-
balance methods in a financial statements model. (In the Cash Flow column, indicate whether the item is an operating activity (OA), an
investing activity (IA), or a financing activity (FA). If an element is not affected by the event, leave the cell blank. Enter any decreases
to account balances and cash outflows with a minus sign. Not all cells will require entry.)
Assets
Cash +
Req A2
+
Balance Sheet
Purchase of computer system
+
Book Value of =
Computer
System
Straight-Line Depreciation
Req B
=
COPELAND DRUGSTORE
Horizontal Statements Model
Stockholders'
Equity
Retained
Earnings
Double-Declining-Balance Depreciation
] + [
1-2
Revenue
Income Statement
Expenses =
< Req A2
Net
Income
Statement of Cash
Flows
Req B >
Show less ▲](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F432126f5-c0ee-4b45-b65f-fbf8817dd920%2F9dd415fd-252b-4115-b6a0-f0f5ad36b712%2Feq64e4_processed.png&w=3840&q=75)
Transcribed Image Text:At the beginning of Year 1, Copeland Drugstore purchased a new computer system for $170,000. It is expected to have a five-year life
and a $30,000 salvage value.
Required
a. Compute the depreciation for each of the five years, assuming that the company uses
(1) Straight-line depreciation.
(2) Double-declining-balance depreciation.
b. Record the purchase of the computer system and the depreciation expense for the first year under straight-line and double-
declining-balance methods in a financial statements model.
Complete this question by entering your answers in the tabs below.
Req A1
Record the purchase of the computer system and the depreciation expense for the first year under straight-line and double-declining-
balance methods in a financial statements model. (In the Cash Flow column, indicate whether the item is an operating activity (OA), an
investing activity (IA), or a financing activity (FA). If an element is not affected by the event, leave the cell blank. Enter any decreases
to account balances and cash outflows with a minus sign. Not all cells will require entry.)
Assets
Cash +
Req A2
+
Balance Sheet
Purchase of computer system
+
Book Value of =
Computer
System
Straight-Line Depreciation
Req B
=
COPELAND DRUGSTORE
Horizontal Statements Model
Stockholders'
Equity
Retained
Earnings
Double-Declining-Balance Depreciation
] + [
1-2
Revenue
Income Statement
Expenses =
< Req A2
Net
Income
Statement of Cash
Flows
Req B >
Show less ▲
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