Cold As Iced CoffeeCold As Iced Coffee

purchased a coffee drink machine on January 1,

20182018,

for

$ 57 comma 000$57,000.

Expected useful life is

1010

years or

50 comma 00050,000

drinks. In

20182018,

12 comma 00012,000

drinks were sold, and in

20192019,

16 comma 00016,000

drinks were sold. Residual value is

$ 2 comma 000$2,000.

Read the requirements

LOADING...

.Requirement 1. Determine the depreciation expense for

20182018

and

20192019

using the following methods: (a) Straight-line (SL), (b) Units of production (UOP), and (c) Double-declining-balance (DDB).For each method (starting with (a) the straight-line method), select the appropriate formula needed to compute annual depreciation and then determine depreciation expense under that method for

20182018

and

20192019.

(Round any depreciation expense per unit amounts to the nearest cent and all other amounts to the nearest whole dollar.)

		Annual Depreciation Formula	2018	2019
a.	SL

b.

UOP

c.

DDB

Requirement 2. Prepare a schedule that shows annual depreciation expense, accumulated depreciation, and book value for

20182018

and

20192019

using the three depreciation methods from Requirement 1.

a. Begin with the straight-line method.

Review your computations from Requirement 1.

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a. Straight-line
	Annual Depreciation	Accumulated
Year	Expense	Depreciation	Book Value
1-1-2018
12-31-2018
12-31-2019

b. Prepare a schedule for the units-of-production method.

Review your computations from Requirement 1.

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b. Units-of-production
	Annual Depreciation	Accumulated
Year	Expense	Depreciation	Book Value
1-1-2018
12-31-2018
12-31-2019

c. Prepare a schedule for the double-declining-balance method.

Review your computations from Requirement 1.

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c. Double-declining-balance
	Annual Depreciation	Accumulated
Year	Expense	Depreciation	Book Value
1-1-2018
12-31-2018
12-31-2019

Requirement 3. Assume that

Cold As Iced CoffeeCold As Iced Coffee

sold the equipment for

$ 38 comma 000$38,000

cash on July 1,

20202020.

Assume that management has depreciated the equipment by using the double-declining-balance method. Record

Cold As Iced CoffeeCold As Iced Coffee's

depreciation for

20202020

and the sale of the equipment on July 1,

20202020.

(Record debits first, then credits. Select the explanation on the last line of the journal entry table.)Begin by recording

Cold As Iced CoffeeCold As Iced Coffee's

depreciation for

20202020.

Date			Accounts and Explanation	Debit	Credit
2020
Jul. 1

Now record the sale of the equipment on July 1,

20202020.

Date			Accounts and Explanation	Debit	Credit
2020
Jul. 1

Choose from any list or enter any number in the input fields and then continue to the next question.

1.	Determine the depreciation expense for 20182018 and 20192019 using the following methods:
	a.	Straight-line
	b.	Units-of-production
	c.	Double-declining-balance
2.	Prepare a schedule that shows annual depreciation expense, accumulated depreciation, and book value for 20182018 and 20192019 using the following methods:
	a.	Straight-line
	b.	Units-of-production
	c.	Double-declining-balance
3.	Assume that Cold As Iced CoffeeCold As Iced Coffee sold the equipment for $ 38 comma 000$38,000 cash on July 1, 20202020. Assume that management has depreciated the equipment by using the double-declining-balance method. Record Cold As Iced CoffeeCold As Iced Coffee's depreciation for 20202020 and the sale of the equipment on July 1, 20202020.