DEPRECIATION METHODS Hansen Supermarkets purchased a radio frequency identification (RFID) system for one of its stores at
Question:
DEPRECIATION METHODS Hansen Supermarkets purchased a radio frequency identification (RFID) system for one of its stores at a cost of $150,000. Hansen determined that the system had an expected life of seven years (or 50,000,000 items scanned) and an expected residual value of $7,200.
Required:
. Determine the amount of depreciation expense for the first and second years of the system’s life using the
(a) straight-line and
(b) double-declining-balance depreciation methods.
. If the number of items scanned the first and second years were 7,200,000 and 8,150,000, respectively, compute the amount of depreciation expense for the first and second years of the system’s life using the units-of-production depreciation method.
. Compute the book values for all three depreciation methods as of the end of the first and second years of the system’s life.
Step by Step Answer:
Cornerstones Of Financial Accounting Current Trends Update
ISBN: 9781111527952
1st Edition
Authors: Jay Rich , Jeff Jones, Maryanne Mowen , Don Hansen