Question

Southern Fried Chicken bought equipment on January 2, 2018, for $30,000. The equipment was expected to remain in service for four years and to operate for 6,000 hours. At the end of the equipments useful life, Southern estimates that its residual value will be $6,000. 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-decing-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 Asset Depreciable Cost Depreciation for the Year Useful Life Depreciation Accumulated Book 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 Date Cost Expense Depreciation Value 1-2-2018 12-31-2018 12-31-2019 12-31-2020 12-31-2021 2. Which method tracks the wear and tear on the equipment most closely? Print Done

Answer 1

Depreciation is charge of asset over useful life of asset.There are many methods to calculate the depreciation

• Straight line method
• Units of production method
• Double diminishing balance