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 $16,500. 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, 2,450 hours; year 2, 2,350 hours; year 3, 2,100 hours; year 4, 2,100 hours; and year 5, 1,000 hours. 3. Assume NGS sold the hydrotherapy tub system for $4,950 at the end of year 3.The following amounts were forecast for year 3: Sales Revenues $54,000; Cost of Goods Sold $42,000; Other Operating Expenses $5,200; and Interest Expense $800. 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.). (Do not round intermediate calculations. Round your answers to the nearest dollar amount.) Operating Expenses: Total Operating Expenses NICOLE'S GETAWAY SPA (Forecasted) Income Statement For the Year Ended Year 3 Straight-Line 0 0 0 Units-of- Production 0 0 0 Double- Declining Balance
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 $16,500. 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, 2,450 hours; year 2, 2,350 hours; year 3, 2,100 hours; year 4, 2,100 hours; and year 5, 1,000 hours. 3. Assume NGS sold the hydrotherapy tub system for $4,950 at the end of year 3.The following amounts were forecast for year 3: Sales Revenues $54,000; Cost of Goods Sold $42,000; Other Operating Expenses $5,200; and Interest Expense $800. 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.). (Do not round intermediate calculations. Round your answers to the nearest dollar amount.) Operating Expenses: Total Operating Expenses NICOLE'S GETAWAY SPA (Forecasted) Income Statement For the Year Ended Year 3 Straight-Line 0 0 0 Units-of- Production 0 0 0 Double- Declining Balance
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 $16,500. 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, 2,450 hours; year 2, 2,350 hours; year 3, 2,100 hours; year 4, 2,100 hours; and year 5, 1,000 hours.
3. Assume NGS sold the hydrotherapy tub system for $4,950 at the end of year 3.The following amounts were forecast for year 3:
Sales Revenues $54,000; Cost of Goods Sold $42,000; Other Operating Expenses $5,200; and Interest Expense $800. 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.). (Do not round intermediate calculations. Round your answers to the
nearest dollar amount.)
Operating Expenses:
Total Operating Expenses
NICOLE'S GETAWAY SPA
(Forecasted) Income Statement
For the Year Ended Year 3
Straight-Line
0
0
0
Units-of-
Production
0
0
0
Double-
Declining
Balance](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe15b8af0-27e1-4c12-b293-7f8d2f41b828%2F51947bb1-150c-4f17-b8d1-5311caebd9bd%2F4r938bl_processed.png&w=3840&q=75)
Transcribed Image Text: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 $16,500. 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, 2,450 hours; year 2, 2,350 hours; year 3, 2,100 hours; year 4, 2,100 hours; and year 5, 1,000 hours.
3. Assume NGS sold the hydrotherapy tub system for $4,950 at the end of year 3.The following amounts were forecast for year 3:
Sales Revenues $54,000; Cost of Goods Sold $42,000; Other Operating Expenses $5,200; and Interest Expense $800. 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.). (Do not round intermediate calculations. Round your answers to the
nearest dollar amount.)
Operating Expenses:
Total Operating Expenses
NICOLE'S GETAWAY SPA
(Forecasted) Income Statement
For the Year Ended Year 3
Straight-Line
0
0
0
Units-of-
Production
0
0
0
Double-
Declining
Balance
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