E10-7 Calculating depreciation amounts by three methods [10–15 min] Mama's Fried Chicken bought equipment on 2 January 2016 for $39000. The equipment was expected to remain in service for four years and to perform 11000 fry jobs. At the end of the equipment's useful life, Mama's estimates that its residual value will be $6000. The equipment performed 1 100 jobs in the first year, 3 300 in the second year, 4 400 in the third year and 2 200 in the fourth year. Requirements 1 Prepare a schedule of depreciation expense per year for the equipment under the three depreciation methods. After two years under reducing-balance depreciation using 2 times the straight-line rate, Mama's switched to the straight-line method. Show your calculations. Note: Three depreciation schedules must be prepared. 2 Which method tracks the wear and tear on the equipment most closely?

E10-7 Calculating depreciation amounts by three methods [10–15 min] Mama's Fried Chicken bought equipment on 2 January 2016 for $39000. The equipment was expected to remain in service for four years and to perform 11000 fry jobs. At the end of the equipment's useful life, Mama's estimates that its residual value will be $6000. The equipment performed 1 100 jobs in the first year, 3 300 in the second year, 4 400 in the third year and 2 200 in the fourth year. Requirements 1 Prepare a schedule of depreciation expense per year for the equipment under the three depreciation methods. After two years under reducing-balance depreciation using 2 times the straight-line rate, Mama's switched to the straight-line method. Show your calculations. Note: Three depreciation schedules must be prepared. 2 Which method tracks the wear and tear on the equipment most closely?

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Description: E10-7 Calculating depreciation amounts by three methods [10–15 min]Mama's Fried Chicken bought equipment on 2 January 2016 for $39000. The equipment wasexpected to remain in service for four years and to perform 11000 fry jobs. At the end of theequi

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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