ACC 213 - Lab #7 for Chapter 8 - Depreciation Methods Name Lab #7 is divided into two parts: Part 1 is a series of depreciation calculations. Use formulas/cell references to make your work as efficient as possible. Part 2 requires adjusting entries and a short written explanation. Instructions Use the following data to complete the depreciation calculations: Equipment Purchased on 1/2/2021 Cost of Equipment $140,000 Expected Life (for SL and DDB) 10 years Expected Life (for Units of Production) 60,000 product units Expected Salvage (or Residual Value) $20,000 Part 1: Straight-Line depreciation Part A - use Excel formulas to calculate depreciation expense, accumulated depreciation, and book values at 12/31 for each year. Part B - using the Excel function (click on fx, choose SLN, fill in the arguments screen), calculate the depreciation expense for years 1, 9 and 10. Units Of Production (Units of Output) depreciation Use Excel formulas to calculate depreciation expense, accumulated depreciation, and book values at 12/31 for each year. Apply your formulas without considering whether you've depreciated too much or too little of the asset! Note: there is no Excel fx for Units of Production depreciation. Double-Declining Balance depreciation Part A - use Excel formulas to calculate depreciation expense, accumulated depreciation, and book values at 12/31 for each year. Apply your formulas without considering whether you've depreciated too much or too little of the asset! Part B - using the Excel function (click on fx, choose DDB, fill in the arguments screen), calculate the depreciation expense for years 1, 9 and 10. Part 2: Part A - complete adjusting entries for each type of depreciation method as of 12/31/21. Part B - answer the question in the commentary section. Part 1 Calculations Straight-Line Depreciation Part A: Construct formulas to calculate Depreciation Expense for each year, and Accumulated Depreciation and Book Value at the end of each year. Accumulated Depreciation Book Value $140,000 Depreciation Expense 1/2/21 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Part B: Using Excel function (fx SLN), determine the depreciation expense for: Year 1 Year 9 Year 10 Units of Output (Units of Production) Depreciation Construct formulas to calculate Depreciation Expense for each year, and Accumulated Depreciation and Book Value at the end of each year. Apply the formula without considering whether you've depreciated too much or too little of the asset! Actual Number of Units Produced Accumulated Depreciation Book Value $140,000 12,200 9,800 3,400 7,100 12,900 5,200 9,700 1,200 400 3,700 Depreciation Expense 1/2/21 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Double-Declining Balance Depreciation Part A: Construct formulas to calculate Depreciation Expense for each year & Accumulated Depreciation and Book Value at the end of each year. Apply the formula without considering whether you've depreciated too much or too little of the asset! Depreciation Expense Iccumulated Depreciation Book Value $140,000 1/2/21 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Part B: Using Excel function (fx DDB), determine the depreciation expense for: Year 1 Year 9 Year 10 Part 2 -- Adiusting Entries & Commentary. A. Prepare the adjusting journal entry for depreciation on 12/31/21 three different ways: Straight-Line, Units of Production, and Double Declining Balance. Acct Titles Debit Credit Adjusting Entry: Straight-Line Adjusting Entry: Units of Prod. Adjusting Entry: DDB B. Are the calculations YOU made for depreciation expense for Double-Declining Balance and Units of Production (in part A). correct? (Answer Yes or No and explain why your calculations are correct or incorrect)
