Fancy Frappucinno purchased a coffee drink machine on January 1,2016, for $16,000. Expected useful life is 5 years or 50,000 drinks. In 2016, 12,000 drinks were sold, and in 2017, 17,000 drinks were sold. Residual value is 1,000.

Requirement 1. Determine the depreciation expense for 2016 and 2017 using the following methods: (a) Straight-line,(b) Units of production and (c) Double declining-balance. For each method (starting with(a) the straight line method). select the appropriate formula needed to comute annual depreciation and then determine depreciacion expense under that method for 2016 and 2017.

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

Requirements

1. Determine the depreciation expense for 2016 and 2017 using the following methods:

a. Straight-line

b. Units-of -production

c. Double -declining -balance

2.Prepare a scheldule that shows annual depreciation expense, accumulated depreciation, and book value for 2016 and 2017 using the following methods:

a. Straight -line

b.Units - of - production

c. Double-declining-balance

3. Assume that Crazy Cappuccino sold the equipment for $18,000 cash on July 1,2018. Assume that management has depreciated the equipment by using the double -declining - balance method. Record Crazy Cappuccino's depreciation for 2018 and the sale of the equipment on july 1,2018.