Mama's Fried Chicken bought equipment on January 2, 2018, for $21,000. The equipment was expected to remain in service for four years and to operate for 4,500 hours. At the end of the equipment's useful life, Mama's estimates that its residual value will be $3,000. The equipment operated for 450 hours the first year, 1,350 hours the second year, 1,800 hours the third year, and 900 hours the fourth year. Read the requirements 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 Straight-Line Depreciation Schedule Depreciation for the Year Asset Depreciable Useful Depreciation Accumulated Date Cost Cost Life Expense Depreciation 1-2-2018 21000 12-31-2018 Value 12-31-2019 1 = 1 = 12-31-2020 12-31-2021 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. = Depreciation per unit )4 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 Book Value 12-31-2018 x 12-31-2019 12-31-2020 Mama's Fried Chicken bought equipment on January 2, 2018, for $21,000. The equipment was expected to remain in service for four years and to operate for 4,500 hours. At the end of the equipment's useful life, Mama's estimates that its residual value will be $3,000. The equipment operated for 450 hours the first year, 1,350 hours the second year, 1,800 hours the third year, and 900 hours the fourth year. Read the requirements DEPICLIQLIDIT POI UITE )4 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 12-31-2018 Book Value 12-31-2019 = 12-31-2020 X 12-31-2021 = Prepare a depreciation schedule using the double-declining-balance (DDB) method. (Enter a "0" for any items with a zero value.) Book Double-Declining-Balance Depreciation Schedule Depreciation for the Year Asset Book DDB Depreciation Accumulated Date Cost Value Rate Expense Depreciation 1-2-2018 12-31-2018 Value = 12-31-2019 12-31-2020 = 12-31-2021 Requirement 2. Which method tracks the wear and tear on the equipment most closely? The method tracks wear and tear most closely
