The company founder hires us as consultants and asks that we oversee the accounting for new equipment purchased on January 1. The founder wants to know the implications of different depreciation methods and estimates for the company's financial statements. Those statements will be used to attract financing from new investors and creditors. At the end of the equipment's first year in operation, we are given the following Tableau Dashboard Estimated Useful Life of Assets Purchase Price & Estimated Salvage Value Building Equipment Truck 20 $70,000 16 $60,000 $50,000 12 $40,000 Years $30,000 1 $20,000 1(a). Determine the equipment's first-year depreciation under the straight-line method. 1(b). Determine the equipment's first-year depreciation under the units-of-production method. Note: Actual units produced for Year 1 were equal to the units estimated to be produced for Year 1. 1(c). Determine the equipment's first-year depreciation under the double-declining balance method. 2. Which method in part 1 results in the highest net income in the first year? 3. If the company anticipates that its use of assets will vary greatly from one year to the next based on usage, which method would we recommend the company use? 4. The founder is concerned that a depreciation method might result in more total depreciation expense over the useful life of an asset than another method. Which method would result in the highest amount of depreciation over an asset's useful life? Complete this question by entering your answers in the tabs below. Required 3 Required 4 Required 1A Required 18 Required 1C Required 2 Determine the equipment's first-year depreciation under the straight-line method. Straight-Line Method Choose Numerator: Choose Denominator: Annual Depreciation Expense = Depreciation expense 7.500 Estimated useful life (years) Cost minus salvage 10.000 Required 1A Required 18 Required 1C Required 2 Required 3 Required 4 Determine the equipment's first-year depreciation under the units-of-production method. Note: Actual units produced for Year 1 were equal to the units estimated to be produced for Year 1. Choose Numerator Cost Units-of-production Depreciation Choose Denominator: Double the State - Annual Depreciation Experte Depreciation expenso per unit 0 Annual Production (units) Depreciation Expense Year 1 Prev Next 1 of 1 A stv 13 In MacBook Air Required 1A Required 1 Required 10 Required 2 Required 3 Required 4 Determine the equipment's first-year depreciation under the double-declining-balance method. Depreciation for the Period End of Period Depreciation Annuai Period Beginning of Depreciation Accumulated Book Value Period Book Value Rate(%) Expense Depreciation First Year Prev 1 of 1 Next MC Graw Hill A E stv 13 MacBook Air Required 1A Required 1B Required 1C Required 2 Required 3 Required 4 Which method in part 1 results in the highest net income in the first year? Which method in part 1 results in the highest net income in the first year? Prev 1 of 1 Mc Graw Next HIM A stv 13 MacBook Air ** 41 AM Required 1A Required 1B Required 1C Required 2 Required 3 Required 4 If the company anticipates that its use of assets will vary greatly from one year to the next based on usage, which method would we recommend the company use? Which method would we recommend the company use? ego DO 1. Identify the amount of credit sales 2. Identify the amount of accounts receivable. 3. Estimate the balance of the Allowance for Doubtful Accounts using the percent of accounts recemos el the percent of uncollectible for accounts receivable 1. Credit sales 2. Total accounts receivable 3. Allowance for Doubtful Accounts Prov 1 of 3 Next > Mc Graw HINI MacBook Air 2: : this question by entering your answers in the tabs below. Book erences Required 1 Required 2 Required 3 Required 4 Estimate the balance of the Allowance for Doubtful Accounts using aging of accounts receivable Accounts Percent receivable uncollectible (%) Not yet due 1 to 30 31 to 60: 61 to 90: Over 90 Estimated balance of allowance for uncollectibles X X x Regards) > Record the estimated bad debts. Note: Enter debits before credits General Journal Debat Credit Transaction Dec 31 View ganar Clear entry Record entry Next > 2 of 3 2 of 3 !!! 2013! Book Complete this question by entering your answers in the tabs below. Seferences Reg 1 and 2 Reg 3 1. Estimate the balance of the Allowance for Doubtful Accounts using percent of sales method. Assume a casting in Allowance for Doubtful Accounts. Hint: Identify the percent of uncollectible for credit sales. 2. Estimate the balance of the Allowance for Doubtful Accounts using percent of receivables method. Assuming balance in Allowance for Doubtful Accounts, Mint: Identify the percent of uncollectible for accounts receivable 1. Estimate the balance of the Allowance for Doubtful Account 2. Estimate the balance of the Allowance for Double Accounts Hae) Next 303 Prev Next 1 of 1 A stv 13 In MacBook Air Required 1A Required 1 Required 10 Required 2 Required 3 Required 4 Determine the equipment's first-year depreciation under the double-declining-balance method. Depreciation for the Period End of Period Depreciation Annuai Period Beginning of Depreciation Accumulated Book Value Period Book Value Rate(%) Expense Depreciation First Year Prev 1 of 1 Next MC Graw Hill A E stv 13 MacBook Air Required 1A Required 1B Required 1C Required 2 Required 3 Required 4 Which method in part 1 results in the highest net income in the first year? Which method in part 1 results in the highest net income in the first year? Prev 1 of 1 Mc Graw Next HIM A stv 13 MacBook Air ** 41 AM Required 1A Required 1B Required 1C Required 2 Required 3 Required 4 If the company anticipates that its use of assets will vary greatly from one year to the next based on usage, which method would we recommend the company use? Which method would we recommend the company use? ego DO 1. Identify the amount of credit sales 2. Identify the amount of accounts receivable. 3. Estimate the balance of the Allowance for Doubtful Accounts using the percent of accounts recemos el the percent of uncollectible for accounts receivable 1. Credit sales 2. Total accounts receivable 3. Allowance for Doubtful Accounts Prov 1 of 3 Next > Mc Graw HINI MacBook Air 2: : this question by entering your answers in the tabs below. Book erences Required 1 Required 2 Required 3 Required 4 Estimate the balance of the Allowance for Doubtful Accounts using aging of accounts receivable Accounts Percent receivable uncollectible (%) Not yet due 1 to 30 31 to 60: 61 to 90: Over 90 Estimated balance of allowance for uncollectibles X X x Regards) > Record the estimated bad debts. Note: Enter debits before credits General Journal Debat Credit Transaction Dec 31 View ganar Clear entry Record entry Next > 2 of 3 2 of 3 !!! 2013! Book Complete this question by entering your answers in the tabs below. Seferences Reg 1 and 2 Reg 3 1. Estimate the balance of the Allowance for Doubtful Accounts using percent of sales method. Assume a casting in Allowance for Doubtful Accounts. Hint: Identify the percent of uncollectible for credit sales. 2. Estimate the balance of the Allowance for Doubtful Accounts using percent of receivables method. Assuming balance in Allowance for Doubtful Accounts, Mint: Identify the percent of uncollectible for accounts receivable 1. Estimate the balance of the Allowance for Doubtful Account 2. Estimate the balance of the Allowance for Double Accounts Hae) Next 303
