Question

[The following information applies to the questions displayed below.) 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 $22,000. The estimated useful life was five years and the residual value was $1,000. Assume that the estimated productive life of the machine is 10,000 hours. Expected annual production was year 1, 2,400 hours, year 2, 2,350 hours, year 3, 2,150 hours, year 4, 2,100 hours, and year 5, 1,000 hours. value: 3.33 points Required: 1. Complete a depreciation schedule for each of the alternative methods. (Do not round intermediate calculations. Round your final answers to the nearest dollar amount. a. Straight-line. Year Depreciation Expense Accumulated Depreciation Book Value At Acquisition Year 1 Year 2 Year 3 Year 4 Year 5

The last time I posted this someone said it came out blurry so I hope this one is better! Please complete the multi-part problem in the layout given. I appreciate your help!

Answer 1

1	Depreciation rate=One year/Useful life=1/5=0.20=20%
	Straight-line depreciation schedule
	Date	Asset cost	Depreciation rate	Depreciable cost	Depreciation expense	Accumulated depreciation	Asset book value
	At acquisition	22000					22000
	Year 1		20%	21000	4200	4200	17800
	Year 2		20%	21000	4200	8400	13600
	Year 3		20%	21000	4200	12600	9400
	Year 4		20%	21000	4200	16800	5200
	Year 5		20%	21000	4200	21000	1000
	Depreciable cost=Cost of the asset-Residual value=22000-1000=$ 21000
	Depreciation expense=Depreciable cost*Depreciation rate
	Asset book value=Cost-Accumulated depreciation
	Accumulated depreciation=Depreciation expense till date
b.	Depreciation expense per unit=Depreciable cost/Estimated productive life=21000/10000=$2.1 per hour
	Units of production depreciation schedule:
	Date	Asset cost	Depreciation per unit	Expected annual production in hours	Depreciation expense	Accumulated depreciation	Asset book value
	At acquisition	22000					22000
	Year 1		2.1	2400	5040	5040	16960
	Year 2		2.1	2350	4935	9975	12025
	Year 3		2.1	2150	4515	14490	7510
	Year 4		2.1	2100	4410	18900	3100
	Year 5		2.1	1000	2100	21000	1000
	Depreciation expense=Depreciation rate per unit*Expected annual production in hours
c.	DDB rate=SL depreciation rate*DDB rate multiplier=20%*2=40%
	Date	Asset cost	DDB rate	Asset book value	Depreciation expense	Accumulated depreciation	Asset book value
	At acquisition	22000					22000
	Year 1		40%	22000	8800	8800	13200
	Year 2		40%	13200	5280	14080	7920
	Year 3		40%	7920	3168	17248	4752
	Year 4		40%	4752	1900.8	19148.8	2851.2
	Year 5		40%	2851.2	1140	20289	1711
	Depreciation expense=Asset book value*Depreciation rate
2	No	Account titles and explanation				Debit	Credit
	1	Cash				6600
		Accumulated depreciation (Year 3)				12600
		Loss on sale of equipment				2800
		Equipment					22000
		(Equipment sold)
	2	Cash				6600
		Accumulated depreciation (Year 3)				14490
		Loss on sale of equipment				910
		Equipment					22000
		(Equipment sold)
	3	Cash				6600
		Accumulated depreciation (Year 3)				17248
		Gain on sale of equipment					1848
		Equipment					22000
		(Equipment sold)
3		(Forecasted) income statement
					Straight line	Units of production	Double declining balance
	Sales revenue				59000	59000	59000
	Less: Cost of goods sold				46000	46000	46000
	Gross profit			a	13000	13000	13000
	Operating expenses:
	Operating expenses				4500	4500	4500
	Depreciation expense (year 3)				4200	4515	3168
	Total operating expenses			b	8700	9015	7668
	Operating income			c=a-b	4300	3985	5332
	Other gains/(losses)
	Interest expense				-900	-900	-900
	Gain on sale of equipment						1848
	Loss on sale of equipment				-2800	-910
	Total			d	-3700	-1810	948
	Net income			c+d	600	2175	6280
	I appreciate your ratings