Chapter 9, Problem 7E

Computing Depreciation under Alternative Methods

Sonic Corporation purchased and installed electronic payment equipment at its drive-in restaurants in San Marcos, TX, at a cost of $27,000. The equipment has an estimated residual value of $1,500. The equipment is expected to process 255,000 payments over its three-year useful life. Per year, expected payment transactions are 61,200, year 1; 140,250, year 2; and 53.550, year 3.

Required;

Complete a depreciation schedule for each of the alternative methods.

1. 1. Straight-line.
2. 2. Units-of-production.
3. 3. Double-declining-balance.