Purity Ice Cream Company bought a new ice cream maker at the beginning of the year at a cost of $8,800. The estimated useful lifewas four years, and the residual value was $900. Assume that the estimated productive life of the machine was 10,000 hours. Actualannual usage was 3,700 hours in year 1; 3,400 hours in year 2; 2,400 hours in year 3; and 500 hours in year 4. 1-b. Complete a separate depreciation schedule by using Units-of-production method. (Round your answers to the nearest dollaramount. Make sure that the carrying amount at the end of year 4 is equal to the residual value. Depreciation expense for the lastperiod should be calculated as Carrying value of 3rd year minus residual value.)YearAt acquisition1234DepreciationExpenseYearAt acquisition1234AccumulatedDepreciationDepreciationExpenseCarryingAmount1-c. Complete a separate depreciation schedule by using Double-declining-balance method. (Round your answers to the nearestdollar amount. Make sure that the carrying amount at the end of year 4 is equal to the residual value. Depreciation expense forthe last period should be calculated as Carrying value of 3rd year minus residual value.)AccumulatedDepreciation$8,800CarryingAmount$8,800

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Description: Purity Ice Cream Company bought a new ice cream maker at the beginning of the year at a cost of $8,800. The estimated useful lifewas four years, and the residual value was $900. Assume that the estimated productive life of the machine was 10,000 hou

Depreciation expense is the one which is charged on the fixed or non-current assets of an entity in…

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Purity Ice Cream Company bought a new ice cream maker at the beginning of the year at a cost of $8,800. The estimated useful life was four years, and the residual value was $900. Assume that the estimated productive life of the machine was 10,000 hours. Actual annual usage was 3,700 hours in year 1; 3,400 hours in year 2; 2,400 hours in year 3; and 500 hours in year 4.

Purity Ice Cream Company bought a new ice cream maker at the beginning of the year at a cost of $8,800. The estimated useful life was four years, and the residual value was $900. Assume that the estimated productive life of the machine was 10,000 hours. Actual annual usage was 3,700 hours in year 1; 3,400 hours in year 2; 2,400 hours in year 3; and 500 hours in year 4.

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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