Nicole's Getaway Spa (NGS) purchased a hydrotherapy tub system to add to thewellness programs at NGS. The machine was purchased at the beginning of year at acost of $7,000. The estimated useful life was five years and the residual value was $50o.Assume that the estimated productive life of the machine is 13,000 hours. Expectedannual production was year 1, 3,100 hours; year 2, 2,500 hours; year 3, 3,400 hours; year4, 2,200 hours; and year 5, 1,800 hours.Required:1. Complete a depreciation schedule for each of the alternative methods. (Do not roundintermediate calculations. Round your final answers to the nearest dollar amount.)a. Straight-line.Depreciation AccumulatedExpenseYearBook ValueDepreciationAt AcquisitionYear 1Year 2Year 3Year 4Year 5 b. Units-of-production.DepreciationExpenseAccumulatedYearBook ValueDepreciationAt AcquisitionYear 1Year 2Year 3Year 4Year 5c. Double-declining-balance.DepreciationExpenseAccumulatedYearBook ValueDepreciationAt AcquisitionYear 1Year 2Year 3Year 4Year 5

Depreciation is the method of accounting which is used for allocating the cost of the physical or…

Nicole's Getaway Spa (NGS) purchased a hydrotherapy tub system to add to the wellness programs at NGS. The machine was purchased at the beginning of year at a cost of $7,000. The estimated useful life was five years and the residual value was $500. Assume that the estimated productive life of the machine is 13,000 hours. Expected annual production was year 1, 3,100 hours; year 2, 2,500 hours; year 3, 3,400 hours; year 4, 2,200 hours; and year 5, 1,800 hours. quired: Complete a depreciation schedule for each of the alternative methods. (Do not round ntermediate calculations. Round your final answers to the nearest dollar amount.) Straigkt-line

Nicole's Getaway Spa (NGS) purchased a hydrotherapy tub system to add to the wellness programs at NGS. The machine was purchased at the beginning of year at a cost of $7,000. The estimated useful life was five years and the residual value was $500. Assume that the estimated productive life of the machine is 13,000 hours. Expected annual production was year 1, 3,100 hours; year 2, 2,500 hours; year 3, 3,400 hours; year 4, 2,200 hours; and year 5, 1,800 hours. quired: Complete a depreciation schedule for each of the alternative methods. (Do not round ntermediate calculations. Round your final answers to the nearest dollar amount.) Straigkt-line

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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Required information [The following information applies to the questions displayed below.) Nicole's Getaway Spa (NGS) purchased a hydrotherapy tub system to add to the wellness programs at NGS. The machine was purchased at the beginning of the year at a cost of $8.500. The estimated useful life was five years and the residual value was $500. Assume that the estimated productive life of the machine is 10,000 hours. Expected annual production was year 1, 2,250 hours; year 2, 2,350 hours; year 3, 2,300 hours, year 4, 2,100 hours; and year 5, 1,000 hours. 3. Assume NGS sold the hydrotherapy tub system for $2.550 at the end of year 3. The following amounts were forecast for year 3: Sales Revenues $44,000; Cost of Goods Sold $34,000; Other Operating Expenses $4,400, and Interest Expense $900. Create an income statement for year 3 for each of the different depreciation methods, ending at Income before Income Tax Expense. (Don't forget to include a loss or gain on disposal for each method.).…
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