Omni Company purchased a piece of Equipment on January 1, 2022 for a cost of $250,000. Prior to putting it into use, Omni paid $1,000 for delivery, $25,000 to reinforce the floor prior to installation and $4,000 for installation. The equipment is anticipated to have a 5-year useful life and a salvage value of $10,000. It is expected that the equipment will produce 60,000 units in year 1, 30,000 units in years 2 and 3 and 35,000 units in years 4 and 5. Management of Omni Company has not decided which method of depreciation to use and has asked you to present an analysis of Depreciation Options.

A. Prepare the journal entry to record the acquisition and subsequent costs of the Equipment. (Answer on Ledger Paper) B. Prepare a depreciation schedule including Depreciation Expense, Accumulated Depreciation and Book Value for each of the following 3 methods: 1. Straight Line Depreciation 2. Units of Production 3. Double Declining Balance C. Assume that Omni Corporation would like to choose the method that will result in the highest net income for the first year. Which deprecation method should they choose? (Answer on Ledger Paper) D. Using the method you chose in C, Prepare and record the journal entry for depreciation for 2022, 2023 and 2024. (on ledger sheet) E. How would the Equipment be shown on the Balance Sheet as of 12/31/2024? F. On June 30, 2025, Omni sells the equipment for $150,000. Record all entries for this transaction (on Ledger Sheet - remember to update depreciation)