! Required information Problem 7-5B Determine depreciation under three methods (LO7-4) [The following information applies to the questions displayed below.) Cheetah Copy purchased a new copy machine. The new machine cost $126,000 including installation. The company estimates the equipment will have a residual value of $31,500. 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 1 3 Hours Used 2,000 2,000 2,000 3,200 Problem 7-58 Part 1
! Required information Problem 7-5B Determine depreciation under three methods (LO7-4) [The following information applies to the questions displayed below.) Cheetah Copy purchased a new copy machine. The new machine cost $126,000 including installation. The company estimates the equipment will have a residual value of $31,500. 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 1 3 Hours Used 2,000 2,000 2,000 3,200 Problem 7-58 Part 1
Chapter9: Capital Budgeting And Cash Flow Analysis
Section9.A: Depreciation
Problem 5P
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Concept explainers
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Question
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Problem 7-5B Part 1
Required:
1. Prepare a depreciation schedule for four years using the straight-line method. (Do not round your intermediate calculations.)
Year
1
2
3
4
Total
CHEETAH COPY
Depreciation Schedule-Straight-Line
End of Year Amounts
Accumulated
Depreciation
Depreciation
Expense
Book Value](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F016b803f-3b09-4e21-aea1-5dc09897428a%2F5e6566c1-f178-4cdc-8ed9-f394a1490fdc%2Fojx9xhi_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Hook
nt
rences
aw
Problem 7-5B Part 1
Required:
1. Prepare a depreciation schedule for four years using the straight-line method. (Do not round your intermediate calculations.)
Year
1
2
3
4
Total
CHEETAH COPY
Depreciation Schedule-Straight-Line
End of Year Amounts
Accumulated
Depreciation
Depreciation
Expense
Book Value
![!
Required information
Problem 7-5B Determine depreciation under three methods (LO7-4)
[The following information applies to the questions displayed below.)
Cheetah Copy purchased a new copy machine. The new machine cost $126,000 including installation. The company
estimates the equipment will have a residual value of $31,500. 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
1
3
Required:
Pront
Hours Used
2,000
2,000
2,000
3,200
Problem 7-58 Part 1](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F016b803f-3b09-4e21-aea1-5dc09897428a%2F5e6566c1-f178-4cdc-8ed9-f394a1490fdc%2Fi44ngsb_processed.jpeg&w=3840&q=75)
Transcribed Image Text:!
Required information
Problem 7-5B Determine depreciation under three methods (LO7-4)
[The following information applies to the questions displayed below.)
Cheetah Copy purchased a new copy machine. The new machine cost $126,000 including installation. The company
estimates the equipment will have a residual value of $31,500. 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
1
3
Required:
Pront
Hours Used
2,000
2,000
2,000
3,200
Problem 7-58 Part 1
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