PR 10-2 A

Comparing three depreciation methods

Monte's Coffee Company purchased packaging equipment on January 5, 2014, for $90,000. The equipment was expected to have a useful life of three years, or 20,000 operating hours, and a residual value of $6,000. The equipment was used for 8,900 hours during 2014, 7,100 hours in 2015, and 4,000 hours in 2016.

Instructions

1 Determine the amount of depreciation expense for the years ended December 31, 2014, 2015, and 2016 by (a) the straight-line method, (b) the units-of-output method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the three years by each method.The following columnar headings are suggested for recording the depreciation expense amounts.

2 What method yields the highest depreciation expense for 2014?

3 What method yields the most depreciation over the three-year life of the equipment?

Please use the attached templates to do the problems

WRD 26e_PR 10-2A.xlsx(28.146 KB) https://fnu.blackboard.com/bbcswebdav/pid-712080-dt-content-rid-6862445_1/xid-6862445_1

PR11-3A

Wage and tax statement data on employer FICA tax

Ehrlich Co. began business on January 2, 2015. Salaries were paid to employees on the last day of each month, and social security tax, Medicare tax, and federal income tax were withheld in the required amounts. An employee who is hired in the middle of the month receives half the monthly salary for that month. All required payroll tax reports were filed, and the correct amount of payroll taxes was remitted by the company for the calendar year. Early in 2016, before the Wage and Tax Statements (Form W-2) could be prepared for distribution to employees and for filing with the Social Security Administration, the employees' earnings records were inadvertently destroyed.

None of the employees resigned or were discharged during the year, and there were no changes in salary rates. The social security tax was withheld at the rate of 6.0% and Medicare tax at the rate of 1.5%. Data on dates of employment, salary rates, and employees' income taxes withheld, which are summarized as follows, were obtained from personnel records and payroll records:

EmployeeDate First EmployedMonthly SalaryMonthly income tax withheld

Arnett Nov 16$5,000$944

CruzJan 24,800833

EdwardsOct 18,0001,592

HarvinDec 16,0001,070

NicksFeb 110,0002,350

ShiancoeMar 111,6002,600

WardNov 165,220876

1.Calculate the amounts to be reported on each employee's Wage and Tax Statement (Form W-2) for 2015. Enter amounts to the nearest cent if required. Enter all amounts as positive numbers.

2.Calculate the following employer payroll taxes for the year: (a) social security; (b) Medicare; (c) state unemployment compensation at 5.4% on the first $10,000 of each employee's earnings; (d) federal unemployment compensation at 0.8% on the first $10,000 of each employee's earnings; (e) total.

Please use the attached templates to do the problems

WRD 26e_PR 11-3A.xlsx(23.771 KB) https://fnu.blackboard.com/bbcswebdav/pid-712080-dt-content-rid-6862446_1/xid-6862446_1