Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Nicole's Getaway Spa (NGS) purchased a hydrotherapy tub system to add to the wellness programs at NGS. The machine was purchased at the beginning of
Nicole's Getaway Spa (NGS) purchased a hydrotherapy tub system to add to the wellness programs at NGS. The machine was purchased at the beginning of the year at a cost of $4,200. The estimated useful life was five years, and the residual value was $500. Assume that the estimated productive life of the machine is 11,800 hours. Expected annual production is: year 1, 3,300 hours; year 2, 2,100 hours; year 3, 2,600 hours; year 4, 1,400 hours; and year 5, 2,400 hours. Required: 1. Complete a depreciation schedule for each of the alternative methods. (Enter all values as positive amount. Round your final answers to nearest whole dollar amount.) a. Straight-line Answer is complete and correct. Year Depreciation Expense Accumulated Depreciation At acquisition Book Value 4,200 3,460 $ 1 $ 740 $ 740 2 740 1,480 2,720 3 740 2,220 1,980 4 740 2,960 1,240 5 740 3,700 500 b. Units-of-production Answer is complete and correct. Year Depreciation Expense Accumulated Depreciation Book Value 4,200 At acquisition $ 1 1,035 $ 1,035 3,165 2,507 2 658 1,693 3 815 2,508 1,692 4 439 2,947 1,253 5 753 3,700 500 c. Double-declining-balance Answer is complete and correct. Year Depreciation Expense Accumulated Depreciation Book Value At acquisition $ 4,200 1 $ 1,680 $ 1,680 2,520 2 1,008 1,512 2,688 3,293 3 605 907 4 363 3,656 544 5 44 3,700 500 2. Assume NGS sold the hydrotherapy tub system for $1,800 at the end of year 3. Prepare the journal entry to account for the disposal of this asset under the three different methods. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Straight-line method: View transaction list Journal entry worksheet Record the entry to account for the disposal of the asset using straight line method. Note: Enter debits before credits. Transaction General Journal Debit Credit 01 Units-of-production method: View transaction list Journal entry worksheet Record the entry to account for the disposal of the asset using Double- declining balance method. Note: Enter debits before credits. Transaction General Journal Debit Credit 03 Record entry Clear entry View general journal
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started