SERIAL PROBLEM: KATE'S CARDS Kate's business is growing faster than she had predicted. In order to keep up, she will need to purchase improved computer hardware. Kate has learned that the software that she uses runs much faster if her computer has a lot of memory. In addition, ber files are very large and she is running out of free space on her existing hard drive. Finally, Kate has heard horror stories about hard disk drive crashes and the possibility that all of her work will be destroyed. In order to protect against this possibility, Kate s Cards has decided to invest in a large commercial grade backup system. The cost of the memory and hard disk drive upgrade to Kale's computer will total $420. The cost of the backup system is S3,000. The memory and hard disk upgrade will increase the productivity of Kate's current computer, however, it will not extend its useful life. The backup system is expected to have a 5-year useful life. 1. How should the expenditure for the memory and hard disk drive upgrade be recorded? Provide the 2. Kate's current computer has 42 months remaining for depreciation purposes (under the straight-line e current method and the double-declining method differ. She is assigning a $5(00 salvage value to the equipment- Kate would like to know the following items journal entry method). The original cost of the computer was $4,800 and had a four-year useful life. The monthly depreciation is $100. How will this current expenditure affect the monthly depreciation 3. Kate would like to know how depreciation on the backup system under both ct a table showing yearly depreciation under both methods
SERIAL PROBLEM: KATE'S CARDS Kate's business is growing faster than she had predicted. In order to keep up, she will need to purchase improved computer hardware. Kate has learned that the software that she uses runs much faster if her computer has a lot of memory. In addition, ber files are very large and she is running out of free space on her existing hard drive. Finally, Kate has heard horror stories about hard disk drive crashes and the possibility that all of her work will be destroyed. In order to protect against this possibility, Kate s Cards has decided to invest in a large commercial grade backup system. The cost of the memory and hard disk drive upgrade to Kale's computer will total $420. The cost of the backup system is S3,000. The memory and hard disk upgrade will increase the productivity of Kate's current computer, however, it will not extend its useful life. The backup system is expected to have a 5-year useful life.
1. How should the expenditure for the memory and hard disk drive upgrade be recorded? Provide the
2. Kate's current computer has 42 months remaining for
3. Kate would like to know how depreciation on the backup system under both ct a table showing yearly depreciation under both methods
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