Question

Please please show explanation and work used to find the answers

Assume Organic Ice Cream Company, Inc., bought a new icee cream production kit (pasteurizer/homogenizer, cooler, aging vat, freezer, and filling machine) at the beginning of the year at a cost of $14,800. The estimated useful life was four years, and the residual value was $1,500. Assume that the estimated productive life of the machine was 9,500 hours. Actual annual usage was 3,800 hours in Year 1; 2,850 hours in Year 2; 1,900 hours in Year 3; and 950 hours in Year 4 Required: 1. Complete a separate depreciation schedule for each of the alternative methods. a. Straight-line. b. Units-of-production c. Double-declining-balance. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 1C Complete a depreciation schedule using the units-of-production method. (Use two decimal places for the factor. Do not round intermediate calculations.) Depreciation Expense Accumulated Net Year Depreciation Book Value $ At acquisition 14,800 1 2 3 1,500 4

Answer 1

Answer

• Working

A	Cost	$            14,800.00
B	Residual Value	$              1,500.00
C=A - B	Depreciable base	$            13,300.00
D	Usage	9,500 hours
E = C/D	Depreciation per hour	$                    1.40

• Requirement 1 B Units of production

Year	Depreciation expense	Accumulated Depreciation	Ending Book Value
At acquisition			$ 14,800.00
1	$            5,320.00	$           5,320.00	$                9,480.00
2	$            3,990.00	$           9,310.00	$                5,490.00
3	$            2,660.00	$        11,970.00	$                2,830.00
4	$            1,330.00	$        13,300.00	$                1,500.00

--Working

Year	Book Value	Usage	Depreciation expense = Usage x $ 1.40	Ending Book Value	Accumulated Depreciation
1	$              14,800.00	3,800	$            5,320.00	$                9,480.00	$           5,320.00
2	$                9,480.00	2,850	$            3,990.00	$                5,490.00	$           9,310.00
3	$                5,490.00	1,900	$            2,660.00	$                2,830.00	$        11,970.00
4	$                2,830.00	950	$            1,330.00	$                1,500.00	$        13,300.00