Question

Hearty Fried Chicken bought equipment on January 2, 2018, for $21,000. The equipment was expected to remain in service for four years and to operate for 6,000 hours. At the end of the equipment's useful life, Hearty estimates that its residual value will be $3,000. The equipment operated for 600 hours the first year, 1,800 hours the second year, 2,400 hours the third year, and 1,200 hours the fourth year. Read the requirements. Requirement 1. Prepare a schedule of depreciation expense, accumulated depreciation, and book value per year for the equipment under the three depreciation methods: straight-line, units-of-production, and double-declining-balance. Show your computations. Note: Three depreciation schedules must be prepared. Begin by preparing a depreciation schedule using the straight-line method. Straight-Line Depreciation Schedule i Requirements Asset Cost Book Depreciation for the Year Depreciable Useful Depreciation Life Expense Accumulated Accumulated Depreciation Date Cost Value 1-2-2018 12-31-2018 12-31-2019 12-31-2020 1. Prepare a schedule of depreciation expense, accumulated depreciation, and book value per year for the equipment under the three depreciation methods: straight-line, units-of-production, and double-declining-balance. Show your computations. Note: Three depreciation schedules must be prepared. 2. Which method tracks the wear and tear on the equipment most closely? Print Done 12-31-2021 Before calculating the units-of-production depreciation schedule, calculate the depreciation expense per unit. Select the formula, then enter the amounts and calculate the depreciation expense per unit. = Depreciation per unit Prepare a depreciation schedule using the units-of-production method.

Answer 1

rate positively ..

requirement -1
			Computation of depreciable value
			Total cost		21000
		Less	Salvage value		3000
			Depreciable value		18000
			Depreciation for the year
	Date	Asset cost	Depreciable cost	Useful life	Depreciation expenses		Accumulated depreciation	Book value
	1-2-2018	21000
	12-31-2018		18000	4	4500		4500	16500
	12-31-2019		18000	4	4500		9000	12000
	12-31-2020		18000	4	4500		13500	7500
	12-31-2021		18000	4	4500		18000	3000
	Unit of production method
	Computation of depreciation expenses per unit
	Depreciation per unit = (Total cost - salvage value) / total unit
	Total mile =				6000
	Total cost	Salvage value	Total mile		Depreciation per unit
	21000	3000	6000		3.000
			Depreciation for the year
	Date	Asset cost	Depreciable per unit	Number of unit	Depreciation expenses		Accumulated depreciation	Book value
	1-2-2018	21000
	12-31-2018		3	600	1800		1800	19200
	12-31-2019		3	1800	5400		7200	13800
	12-31-2020		3	2400	7200		14400	6600
	12-31-2021		3	1200	3600		18000	3000
	Double declining method
	Depreciation rate = 2/4			50%
			Depreciation for the year
	Date	Asset cost	Book value	DDB rate	Depreciation expenses		Accumulated depreciation	Book value
	1-2-2018	21000
	12-31-2018		21000	50%	10500		10,500	10,500
	12-31-2019		10500	50%	5250		15,750	5,250
	12-31-2020		5250		2250		18,000	3,000
	12-31-2021		3000		0		18,000	3,000
requirement -2	Unit of production method tracks wear and tear most closely.