A. Data The PATI Hotel bought a dishwashing machine in April 2021.

- Payment of $6,000 plus $200 for transportation and $600 for installation expenses. - It is an estimated useful life of 7 years. - A trade-in value of $500, after the seventh year. - A washing capacity of 300,000 pounds of use, warranty for 7 years, whichever comes first. - In the first year I wash 20,000 pounds, then 25,000 pounds and 18,000 pounds in the third year of use.

B. Make a table in Excel and set: 1. Annual depreciation using the straight-line method for life. 2. Depreciation and book value using units of production for the third year. 3. Depreciation and book value using the accelerated declining method of 1.25 for the first four years.

C. In the same table make the depreciation journal entries: DR and CR for each method.

D.Recommendation: 1. Which of the above calculation methods do you favor more? Why? 2. If at the end of the fourth year you can sell this machine for $2,000: would you sell it?

*******Below are the answers I need section C to be done********

Calculation of depreciation expense using various methods :

Cost of dishwashing machine = $6000

add: Transportation cost = $200

Add: Installation cost = $600

Total cost = $ 6800

Trade in value = $500

Useful life = 7 years

B 1)Calculation of depreciation using SLM method :

Depreciation Expense = Cost of machine - Salvage value / useful life

= $6800 - $ 500 / 7

= $900

B 2) Calculation of depreciation expense and book value using unit of production method for the third year:

Total capacity = 300000 pounds

First year = 20000 pounds

Second year = 25000 pounds

Third year = 18000 pounds

Depreciation expense First year = (Cost - Salvage value )* Yearly capacity/ Total capacity

= ( $6800 - $500) * 20000 / 300000

= $420

Book value at the end of First year = $6800 - 420 = $6380

Depreciation expense Second Year = ($6800 - $500) * 25000/ 300000

= $525

Book Value at the end of second year = $ 6380 - 525 = $5855

Depreciation expense Third year = ($6800 - $500) * 18000/ 300000

= $378

Book value at the end of Third year = $5855 - $ 378 = 5477

B 3) Calculation of depreciation expense and book value using accelerated declining method of 1.25 for the first four years:

Calculation of depreciation rate = 100%/ 7 = 14.28% * 1.25 =17.86%

Year	Cost	Rate	Depreciation Expense	Book Value
1	$6800	17.86%	$1214.48	$5585.52
2	$5585.52	17.86%	$997.57	$4587.95
3	$4587.95	17.86%	$819.41	$3768.54
4	$3768.54	17.86%	$673.06	$3095.48

D 1)

SLM method of depreciation is the most favourable method to calculate depreciation as we have to calculate depreciation only once which will continue over the life of the asset.

2) At the end of fourth year Book value of machine using SLM method = $6800 - (900*4) = $3200

Sale price = $2000

No we will not sale the machine at the end of 4th year as it will make us a loss of $ 1200