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Nicole's Spa purchased a hydrotherapy tub system to add to the wellness programs offered at the spa. The machine was purchased at the beginning of
Nicole's Spa purchased a hydrotherapy tub system to add to the wellness programs offered at the spa. The machine was purchased at the beginning of the year at a cost of $7,900. The estimated useful life of the tub was five years and the residual value was $500. Assume that the estimated productive life of the machine is 13,000 hours. Expected annual usage is 3,100 hours in year one, 2,500 hours in year two. 3,400 hours in year three, 2,200 hours in year four and 1,800 hours in year five. Complete a depreciation schedule for each of the following methods a. Straight line b. Double declining balance C. Units-of-production Assume that the tub system was sold for $2,100 at the end of year three. Prepare the journal entry to account for the disposal of this asset under the three different methods
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