Question

Assume Organic Ice Cream Company, Inc., bought a new ice cream production kit (pasteurizer/homogenizer, cooler, aging vat, freezer, and filling machine) at the beginning of the year at a cost of $12,000. The estimated useful life was four years, and the residual value was $960. Assume that the estimated productive life of the machine was 9,200 hours. Actual annual usage was 3,680 hours in Year 1; 2,760 hours in Year 2; 1,840 hours in Year 3, and 920 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. Reg 1A Reg 1B Req 1C Complete a depreciation schedule using the units-of-production method. (Use two decimal places for the per unit output factor. Do not round intermediate calculations.) Year ar Depreciation Expense Accumulated Depreciation Net Book Value At acquisition

Answer 1

1) Straight line Depreciation

Year	Depreciation expense	Accumulated depreciation	Net book value
At acquisition			12000
1	2760	2760	9240
2	2760	5520	6480
3	2760	8280	3720
4	2760	11040	960

2) Unit of production

Year	Depreciation expense	Accumulated depreciation	Net book value
At acquisition			12000
1	4416	4416	7584
2	3312	7728	4272
3	2208	9936	2064
4	1104	11040	960

3) Double decline balance

Year	Depreciation expense	Accumulated depreciation	Net book value
At acquisition			12000
1	6000	6000	6000
2	3000	9000	3000
3	1500	10500	1500
4	540	11040	960