E Homework:Part 1 of 5Hearty Fried Chicken bought equipment on January 2, 2024, for $39,000. The equipment was expected to remain in service for four years and to operate for 11,000 hoursAt the end of the equipment's useful life, Hearty estimates that its residual value will be $6,000. The equipment operated for 1,100 hours the first year, 3,300 hours thesecond year, 4,400 hours the third year, and 2.200 hours the fourth year.Read the requirements.Requirement 1. Prepare a schedule of depreciation expense, accumulated depreciation, and book value per year for the equipment under the three depreciationmethods: straight-line, units-of-production, and double-declining-balance. Show your computations. Note: Three depreciation schedules must be prepared.Begin by preparing a depreciation schedule using the straight-line method.Straight-Line Depreciation ScheduleDepreciation for the YearDepreciableUsefulDepreciation AccumulatedBookAssetDateCostLifeExpenseDepreciationValueCost1-2-202412-31-202412-31-202512-31-202612-31-2027

Depreciation can be defined as a decrease in the carrying value of asset due to its usage in the…

Answered: Hearty Fried Chicken bought equipment…

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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Mobley purchased a used van for use in its business on January 1, 2020. It paid $18,000 for the van. Mobley expects the van to have a useful life of four years, with an estimated residual value of $1,500. Mobley expects to drive the van 21,000 miles during 2020, 22,000 miles during 2021, 25,000 miles in 2022, and 97,000 miles in 2023, for total expected miles of 165,000. Read the requirements (Complete all input fields. Enter a 0 for any zero values.) Year Start 2020 2021 2022 2023 Straight-line method Annual Depreciation Accumulated Expense Depreciation Book Value
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On January 3, 2020, Gagne Inc. paid $320,000 for a computer system. In addition to the basic purchase price, the company paid a setup fee of $2,500, $6,400 sales tax, and $21,100 for special installation. Management estimates that the computer will remain in service for five years and have a residual value of $20,000. The computer will process 50,000 documents the first year, decreasing annually by 5,000 during each of the next four years (that is 45,000 documents in 2021, 40,000 documents is 2022, and so on). In trying to decide which depreciation method to use, the company president has requested a depreciation schedule for each of three depreciation methods (straight-line, units-of-production, and double-diminishing-balance). Before completing the straight-line depreciation schedule, calculate the straight-line depreciation rate. First, select the labels for the formula and then compute the rate. (Round the rate to two decimal places.) Date January 3, 2020 December 31, 2020 December…
[The following information applies to the questions displayed below.]Cheetah Copy purchased a new copy machine. The new machine cost $140,000 including installation. The company estimates the equipment will have a residual value of $35,000. Cheetah Copy also estimates it will use the machine for four years or about 8,000 total hours. Actual use per year was as follows: Year Hours Used 1 3,000 2 2,000 3 2,000 4 2,000 2. Prepare a depreciation schedule for four years using the double-declining-balance method. (Hint: The asset will be depreciated in only two years.) (Do not round your intermediate calculations.) Please do a depreciation schdeule in double declining balance method witrh a coulumn for year 1-4 with total on bottom and end of year amounts for each year with a column for depreciation expense and accumulated deprecaiton and book value. Thanks a lot.
Rufiel Corporation purchased a new machine on JULY 1, 2020. The machine cost $40,000 and had an estimated salvage value of $4,000. (NOTE THE PURCHASE DATE IS JULY 1, 2020) Inverness estimated that the machine will have a useful life of 6 years or 100,000 units. Inverness uses the machine in its manufacturing operations and produces 20,000 units in Year 1, 33,000 units in Year 2 and 19,000 units in Year 3, 17,000 units in Year 4 and 6,000 units in Year 5 and 5,000 units in Year 6. b) Indicate what is the balance of Accumulated Depreciation at the end of each year using the Units-of-Production Method
A company is thinking when to replace its old machine. It has two choices: replace the old machine now, or replace it at the end of seven years. Currently, the old machine has a salvage value of $3 million and book value of $1.5 million. If it is not sold, it will require maintenance costs of $770,000 at the end of the year over the nextsix years. The depreciation expense for the machine is $300,000 per year. At the end of six years, the machine will have a salvage value of only $100,000 and a book value of $0. If the company replaces the old machine now, the new machine will cost $4.9 million and will require maintenance costs of $320,000 at the end of each year during its six years economic life. At the end of six years, the new machine will have a salvage value of $900,000. It willbe fully depreciated using the straight-line method. If the company replaces the old machine in six years, a new machine will cost $3.5 million. The company will need to purchase this machine regardless of…
The Darlington Equipment Company purchased a machine 5 years ago, prior to the TCJA, at a cost of $80,000. The machine had an expected life of 10 years at the time of purchase, and it is being depreciated by the straight-line method by $8,000 per year. If the machine is not replaced, it can be sold for $5,000 at the end of its useful life. A new machine can be purchased for $160,000, including installation costs. During its 5-year life, it will reduce cash operating expenses by $40,000 per year. Sales are not expected to change. At the end of its useful life, the machine is estimated to be worthless. The new machine is eligible for 100% bonus depreciation at the time of purchase. The old machine can be sold today for $50,000. The firm's tax rate is 25%. The appropriate WACC is 9%. a. If the new machine is purchased, what is the amount of the initial cash flow at Year 0 after bonus depreciation is considered? Cash outflow should be indicated by a minus sign. Round your answer to the…
Gruman Company purchased a machine for $198,000 on January 2, Year 1. It made the following estimates: Service life 5 years or 10,000 hours Production 180,000 units Residual value $ 18,000 In Year 1, Gruman uses the machine for 2,000 hours and produces 45,000 units. In Year 2, Gruman uses the machine for 1,200 hours and produces 30,000 units. If required, round your final answers to the nearest dollar. For each method, what is the book value of the machine at the end of Year 1? At the end of Year 2? Straight-line method Year 1 Year 2 Sum-of-the-years'-digits method Year 1 Year 2 Double-declining-balance method Year 1 $fill in the blank 15 Year 2 $fill in the blank 16 Activity method based on hours worked Year 1 $fill in the blank 17 Year 2 $fill in the blank 18 Activity method based on units of output Year 1 $fill in the blank 19 Year 2 $fill in the blank 20
Odell purchased a used van for use in its business on January 1, 2020. It paid $14,000 for the van. Odell expects the van to have a useful life of four years, with an estimated residual value of $1,100. Odell expects to drive the van 18,000 miles during 2020, 16,000 miles during 2021, 9,000 miles in 2022, and 8,600 miles in 2023, for total expected miles of 51,600. Read the requirements. (Complete all input fields. Enter a 0 for any zero values.) Year Start 2020 2021 2022 2023 Straight-line method Annual Depreciation Accumulated Expense Depreciation Book Value

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