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Hello, can someone please help me with the bottom highlighted in yellow? Thanks! Mama's Fried Chicken bought equipment on January 2, 2018, for $39,000. The
Hello, can someone please help me with the bottom highlighted in yellow? Thanks!
Mama's Fried Chicken bought equipment on January 2, 2018, for $39,000. The equipment was expected to remain in service for four years and to operate for 11,000 hours. At the end of the equipment's useful life, Mama's estimates that its residual value will be $6,000. The equipment operated for 1,100 hours the first year, 3,300 hours the second year, 4,400 hours the third year, and 2,200 hours the fourth year. Requirement 1. Prepare a schedule of depreciation expense, accumulated depreciation, and book value per year for the equipment under the three depreciation methods: straight-line, units-of-production, and double-declining-balance. Show your computations. Note: Three depreciation schedules must be prepared. Begin by preparing a depreciation schedule using the straight-line method. Book Value Straight-Line Depreciation Schedule Depreciation for the Year Asset Depreciable Useful Depreciation Accumulated Date Cost Cost Life Expense Depreciation 1-2-2018 $ 39,000 12-31-2018 $ 33,000 4 years $ 8,250 $ 8,250 12-31-2019 33,000 4 years 8,250 16,500 12-31-2020 33,000 1 4 years 8,250 24,750 12-31-2021 33.000 4 years 8,250 33,000 $ 39,000 30,750 = 22,500 14.250 6,000 Before calculating the units-of-production depreciation schedule, calculate the depreciation expense per unit. Select the formula, then enter the amounts and calculate the depreciation expense per unit. Cost Residual value Useful life in units 17 ) / Depreciation per unit 3 ($ 39,000 $ 6,000 11,000 Book Value Prepare a depreciation schedule using the units-of-production method. Units-of-Production Depreciation Schedule Depreciation for the Year Asset Depreciation Number of Depreciation Accumulated Date Cost Per Unit Units Expense Depreciation 1-2-2018 $ 39,000 12-31-2018 3 x 1,100 = $ 3,300 $ 3,300 12-31-2019 3 3,300 = 9,900 13,200 12-31-2020 4,400 = 13,200 26,400 12-31-2021 3 x 2,200 6,600 33,000 $ 39,000 35,700 25,800 12,600 6,000 Prepare a depreciation schedule using the double-declining-balance (DDB) method. (Enter a "0" for any items with a zero value.) Double-Declining-Balance Depreciation Schedule Depreciation for the Year Asset Book DDB Depreciation Accumulated Book Date Cost Value Rate Expense Depreciation Value 1-2-2018 $ 39,000 $ 39,000 12-31-2018 39,000 x 2 x (1/4) = $ 19,500 $ 19,500 19,500 12-31-2019 2 x (1/4) 9,750 29,250 9,750 12-31-2020 9,750 12-31-2021 19,500 x 11Step by Step Solution
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