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Frito Inc. acquired equipment on January 1 at a cost of $24,000 that is estimated to have a useful life of five years and a residual value of $6,000. Required Prepare a depreciation schedule showing annual depreciation expense, and year-end accumulated depreciation and book value over the life of the asset using the following methods. a. Straight-line method. b. Sum-of-the-years'-digits method. c. Double-declining-balance method. Straight-Line Method Sum-of-the Years'-Digits Method a. Straight-Line Depreciation Method Reporting Period Depreciation for the Period Depreciation Expense Jan. 1 Year 1 Dec. 31 Year 1 $ Dec. 31 Year 2 Dec. 31 Year 3 Dec. 31, Year 4 Dec. 31, Year 5 Accumulated Depreciation 6,000 x $ 0x 0x 0x 0x End of Period 6,000 x 0x 0x 0x 0x $ Double-Declining-Balance Method Book Value 24,000 ✓ 18,000 x 24,000 24,000 24,000 24,000

Frito Inc. acquired equipment on January 1 at a cost of $24,000 that is estimated to have a useful life of five years and a residual value of $6,000. Required Prepare a depreciation schedule showing annual depreciation expense, and year-end accumulated depreciation and book value over the life of the asset using the following methods. a. Straight-line method. b. Sum-of-the-years'-digits method. c. Double-declining-balance method. Straight-Line Method Sum-of-the Years'-Digits Method a. Straight-Line Depreciation Method Reporting Period Depreciation for the Period Depreciation Expense Jan. 1 Year 1 Dec. 31 Year 1 $ Dec. 31 Year 2 Dec. 31 Year 3 Dec. 31, Year 4 Dec. 31, Year 5 Accumulated Depreciation 6,000 x $ 0x 0x 0x 0x End of Period 6,000 x 0x 0x 0x 0x $ Double-Declining-Balance Method Book Value 24,000 ✓ 18,000 x 24,000 24,000 24,000 24,000

FINANCIAL ACCOUNTING
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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Frito Inc. acquired equipment on January 1 at a cost of $24,000 that is estimated to have a useful life of five years and a residual value of $6,000. Required Prepare a depreciation schedule showing annual depreciation expense, and year-end accumulated depreciation and book value over the life of the asset using the following methods. a. Straight-line method. b. Sum-of-the-years'-digits method. c. Double-declining-balance method. Straight-Line Method Sum-of-the Years'-Digits Method a. Straight-Line Depreciation Method Reporting Period Depreciation for the Period Depreciation Expense Jan. 1 Year 1 Dec. 31 Year 1 $ Dec. 31 Year 2 Dec. 31 Year 3 Dec. 31, Year 4 Dec. 31, Year 5 End of Period Accumulated Depreciation 6,000 $ 0 x 0 x 0 x 0 x 6,000 x 0 x 0 x 0 x 0 x $ Double-Declining-Balance Method Book Value 24,000 ✓ 18,000 * 24,000 24,000 24,000 24,000
Transcribed Image Text:Frito Inc. acquired equipment on January 1 at a cost of $24,000 that is estimated to have a useful life of five years and a residual value of $6,000. Required Prepare a depreciation schedule showing annual depreciation expense, and year-end accumulated depreciation and book value over the life of the asset using the following methods. a. Straight-line method. b. Sum-of-the-years'-digits method. c. Double-declining-balance method. Straight-Line Method Sum-of-the Years'-Digits Method a. Straight-Line Depreciation Method Reporting Period Depreciation for the Period Depreciation Expense Jan. 1 Year 1 Dec. 31 Year 1 $ Dec. 31 Year 2 Dec. 31 Year 3 Dec. 31, Year 4 Dec. 31, Year 5 End of Period Accumulated Depreciation 6,000 $ 0 x 0 x 0 x 0 x 6,000 x 0 x 0 x 0 x 0 x $ Double-Declining-Balance Method Book Value 24,000 ✓ 18,000 * 24,000 24,000 24,000 24,000
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