E8 8 Computing Depreciation Under Alternative Methods Lo8 3 Purity Ice Cream Company Bought A New Ice Cream Maker At The 1 (35.81 KiB) Viewed 46 times
E8 8 Computing Depreciation Under Alternative Methods Lo8 3 Purity Ice Cream Company Bought A New Ice Cream Maker At The 2 (49.34 KiB) Viewed 46 times
E8-8 Computing Depreciation under Alternative Methods LO8-3 Purity Ice Cream Company bought a new ice cream maker at the beginning of the year at a cost of $8,000. The estimated useful life was four years, and the residual value was $900. Assume that the estimated productive life of the machine was 10,000 hours. Actual annual usage was 3,700 hours in year 1, 3,000 hours in year 2; 2,100 hours in year 3, and 1,200 hours in year 4 Required: 1-a. Complete a separate depreciation schedule by using Straight-line method. (Round your answers to the nearest dollar amount. Make sure that the carrying amount at the end of year 4 is equal to the residual value. Depreciation expense for the last period should be calculated as Carrying value of 3rd year minus residual value.) Year At acquisition 1 2 3 4 Depreciation Expense $ 1,775 1.775 1.775 1.775 Accumulated Depreciation 1.775 3.550 5.325 7.100 Carrying Amount $ 8,000 6.225 4,450 2.675 900
es 1-b. Complete a separate depreciation schedule by using Units of production method. (Round your answers to the nearest dollar amount. Make sure that the carrying amount at the end of year 4 is equal to the residual value. Depreciation expense for the last period should be calculated as Carrying value of 3rd year minus residual value.) Year Af acquisition 2 3 4 Depreciation Expense Accumulated Depreciation 4,000 S 2,000 1.000 100 4,000 6,000 7,000 7.100 Carrying Amount $ 8,000 4,000 2.000 1,000 900
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