Question

E9-7 Computing Depreciation under Alternative Methods [LO 9-3) Sushi Corp. purchased and installed electronic payment equipment at its drive-in restaurants in San Marcos, TX, at a cost of $51,300. The equipment has an estimated residual value of $3,300. The equipment is expected to process 267,000 payments over its three-year useful life. Per year, expected payment transactions are 64,080, year 1; 146,850, year 2; and 56,070, year 3. Required: Complete a depreciation schedule for each of the alternative methods. 1. Straight-line. 2. Units-of-production 3. Double-declining balance. Complete this question by entering your answers in the tabs below. Required Required Required Complete a depreciation schedule for Straight-line method. (Do not round intermediate calculations.) Income Balance Sheet Statement Year Depreciation Cost AccumulateBook Expense DepreciationValue At acquisition Required 1 Required 2 >

Answer 1

51300 3300 48000 Cost of the Equipment Less : Salvage Value Depreciable Value of the Machine Life of the Machine Life of the Equipement (Units) Straight Line Method Annual Depreciation : Depreciable Value / Life annual Depreciation :48000/3 267000 16000 Income Statement Balance Sheet Accumulat ed Depreciation Expenses Cost Year At Acquissition Depreciati on Book Value 513001 51300 160001 35300 51300 320001 19300 513000 480001 33001 16000 16000 16000

Units of Activity Method Annual Depreciation : Depreciable Value/Life Depreciation Per unit : 33000/267000 0.18 Income Statement Balance Sheet Accumulat Depreciation Expenses Cost on Year At Acquissition Depreciati Book Value 51300 51300 11520 39780 5130037920 13380 51300 48000 3300 11520 26400 10080

Double Declining balance Method Rate of Depreciation = (1/Life 2 Depreciation Rate = (1/3)*2 66.667% Double Declining balance Method Year Book Value Depreciation % Depreciatic Book value 11 5 1300 67% 34200 17100 2017100 6 7% 11400 5700 30 57001 67% 2400 3300 Income Statement Depreciation Expenses Cost Year At Acquissition Balance Sheet Accumulat| ed Depreciati on Book Value 51300 51300 34200 17100 51300 45600 5700 51300 48000 3300 21 3 34200 114001 2400