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B H 1 M 2 3 Prepare depreciation schedules using Straight-line, Units-of-production, and double-declining balance depreciation. Make use of Excel/sheets capabilities by using as many formulas and functions as possible. 4 5 6 Chapter & Course Outcomes: (demonstrated in this project) A Record the journal entry to capitalize a long term tangible asset. B Calculate depreciation for long term tangible assets using straight line, units of production and double declining balance. C Prepare the journal entry to record depreciation of an asset. D Analyze the impact of each depreciaion method on the financial satements. Use Microsoft Excel proficiently to record and summarize information used in E business analysis and decision making. REQUIRED FOR POINTS: A. Complete a depreciation schedule for the new tractor using all 3 depreciation methods. Link/reference all cells on your depreciation schedules back to the Given data section. Use the add/sum/subtract functionality as needed. Sullivan Ranch Corporation has purchased a new tractor on Jan 1, year 1 paying 10% of the purchase price in cash and signing a 2 year note for the balance. The following information is given: 7 8 Reference or given data section. Each calculation should reference back to this information 9 Cost: $ Estimated Residual: $ 165,000 15,000 10 11 B. Record the following in the general journal. Link your amounts back to the depreciation schedule. Add cells as needed to the given data section. 4 Estimated Life in years Estimated Life in hours Numerous examples have been provided or completed in chapter 9. 12 1,200 13 Actual hours per year Month Purchased for recalculation question 4 14 75,000 1 2 3 15 1. Record the entry for the original purchase on Jan 1, Year 1 2. Record the journal entry for Dec 31, year 1 for each of the methods. Use the journal next to the depreciation schedule for each method. 3. Record the journal entry for each method if the tractor is sold Jan 1, year 3 for $75,000. 4. Recalculate ONLY the year 1 depreciation for each method if the tractor had been purchased on April 1 rather than Jan 1. Record the new year 1 journal entry for this change. If no change is needed, please record "no change" in the journal entry. 360 Amount of cash for sale 300 320 220 16 17 4 18 19 C. Provide an answer to the following: Which method will provide the B1:41 B D G H K L M fx You must make a copy before using this sheet. This is the master. File (right under the title) then make a copy to save to your own Google Drive or Download as Microsoft Excel E F 1 J C. Provide an answer to the following: Which method will provide the highest net income in year 3 all other factors being equal? Include a brief explanation for your answer. 20 21 22 23 Answer: 24 DESCRIPTION ACCOUNT Debit Credit 25 There are some built in formulas in Excel & Sheets related to depreciation. Use them or design your own. DATE Year 1 Jan 26 1 27 28 29 30 DATE DESCRIPTION ACCOUNT Debit Credit 31 32 Dec 31 Prepare a straight-line depreciation schedule using Excel/Sheet formulas for years 1-4. The schedule should contain for each year: the year number, the depreciation expense, the accumulated depreciation and the book value. Sullivan Ranch Corporation Depreciation Schedule Straight-line method End of year amounts Depreciation Expense Accumulated Depreciation Book Value Purchase Jan 1 year 1 Dec 31 year 1 Dec 31 year 2 Dec 31 year 3 Dec 31 year 4 33 Year 34 Jan 1 35 36 37 38 Dec 31 39 40 41 42 Prepare a units of production depreciation schedule using Excel/Sheet formulas for years 1-4. The schedule should contain for each year: the year number, the depreciation expense, the accumulated depreciation and the book value. 43 44 Sullivan Ranch Corporation DATE DESCRIPTION ACCOUNT Debit Credit 45 --- III. LL. ------- -IL. B D E G H J L M 42 Prepare a units of production depreciation schedule using Excel/Sheet formulas for years 1-4. The schedule should contain for each year: the year number, the depreciation expense, the accumulated depreciation and the book value. 43 44 DATE DESCRIPTION ACCOUNT Debit Credit 45 Sullivan Ranch Corporation Depreciation Schedule Units of production method End of year amounts Depreciation Expense Accumulated Depreciation Book Value 46 Dec 31 47 48 Jan 1 49 Year Purchase Jan 1 year 1 Dec 31 year 1 Dec 31 year 2 Dec 31 year 3 3 Dec 31 year 4 50 51 52 Dec 31 53 54 55 56 Prepare a double declining depreciation schedule using Excel/Sheet formulas for years 1-4. The schedule should contain for each year: the year number, the depreciation expense, the accumulated depreciation and the book value. 57 58 DATE DESCRIPTION ACCOUNT Debit Credit 59 Sullivan Ranch Corporation Depreciation Schedule Double declining method End of year amounts Depreciation Expense Accumulated Depreciation Book Value 60 Dec 31 61 62 Jan 1 63 64 Year Purchase Jan 1 year 1 Dec 31 year 1 Dec 31 year 2 Dec 31 year 3 Dec 31 year 4 65 66 Dec 31 67 68 69
