CC9-1 Accounting for the Use and Disposal of Long-Lived Assets [LO 9-3, LO 9-5 The following information applies to the questions displayed below. Nicole's Getaway Spa (NGS) purchased a hydrotherapy tub system to add to the wellness programs at NGS The machine was purchased at the beginning of the year at a cost of $16,000. The estimated useful life was five years and the residual value was $1,000. Assume that the estimated productive life of the machine is 10,000 hours. Expected annual production was year 1, 2,400 hours year 2, 2,300 hours, year 3, 2,200 hours year 4, 2,100 hours; and year 5, 1,000 hours. References CC9 1 Accounting for the Use and Disposal of Long-L Assets [LO 9-3, LO 9-5] Section Break 21 value: 1.00 points CC9-1 Part 1 Required 1. Complete a depreciation schedule for each of the alternative methods. (Do not round intermediate calculations. Round your final answers to the nearest dollar amount.) a. Straight-line epreciation Accumulated Expense Year At Acquisition Year 1 Year 2 Year 3 Year 4 Year 5 Book Value Depreciation b. Units-of-production. Depreciation Accumulated Depreciation Year At Acquisition Year 1 Year 2 Year 3 Year 4 Year 5 Book Value Expense C. Double-declining-balance epreciation Accumulated Expense Year At Acquisition Year 1 Year 2 Year 3 Year 4 Year 5 Book Value Depreciation CC9-1 Part 2 2. Assume NGS sold the hydrotherapy tub system for $4,800 at the end of year 3. Prepare the journal entry to account for the disposal of this asset under the three different methods. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Round your final answers to the nearest dollar amount.) View transaction list Import a new list Record the disposal of the hydrotherapy tub system for $4,800 in year 3 assuming depreciation was calculated using the straight line method 1 Record the disposal of the hydrotherapy tub system for $4,800 in year 3 assuming depreciation was calculated using the units-of-production method 2 Record the disposal of hydrotherapy tub system for $4,800 in year 3 assuming depreciation was calculated using the double-declining method 3 Credit Notejournal entry has been entered Record entry Clear entry View general journal C9-1 Part 3 The following amounts were forecast for year 3: Sales Revenues S53,000; Cost of Goods Sold $41,000 Other Operating Expenses $5,300; and Interest Expense $1,100. Create an income statement for year 3 for each of the different depreciation methods, ending at Income before Income Tax Expense. (Don't forget to include a loss or gain on disposal for each method.). (Do not round intermediate calculations. Round your answers to the nearest dollar amount.) NICOLE'S GETAWAY SPA (Forecasted) Income Statement For the Year Ended Year 3 Straight tine Units-of- Production Double- Declining Balance Operating Expenses Total Operating Expenses
