E8-9 (Algo) Computing Depreciation under Alternative Methods LO8-3

Assume Organic Ice Cream Company, Inc., bought a new ice cream production kit (pasteurizer/homogenizer, cooler, aging vat, freezer, and filling machine) at the beginning of the year at a cost of $24,000. The estimated useful life was four years, and the residual value was $2,580. Assume that the estimated productive life of the machine was 10,200 hours. Actual annual usage was 4,080 hours in Year 1; 3,060 hours in Year 2; 2,040 hours in Year 3; and 1,020 hours in Year 4.

Required:

1. Complete a separate depreciation schedule for each of the alternative methods.

a. Straight-line. Complete a deprecation schedule using the Straight-line method.

b. Units-of-production. Complete a depreciation schedule using the units-of-production method.

c. Double-declining-balance. Complete a depreciation schedule using the double-decline-balance method.