Think about the last time you had a hamburger—maybe it was at a local fast- food restaurant. If you were lucky, maybe it was a Spangles burger. Spangles enjoys a reputation in the Wichita, Kansas, area of providing high- quality food and offering a 1/3- pound hamburger that has been voted “ Best Burger” year after year.
Spangles is known not only for its food but also for its retro look. When you walk into a Spangles restaurant, you step back in time to a 1950’s diner complete with neon lights, pictures of pop stars from the’ 50s, and a Wurlitzer jukebox.
Two brothers, Craig and Dale Steven, opened their first restaurant in 1978. Following that first restaurant, Spangles continued to grow, developing into a multi- store success. Currently, Spangles operates 25 restaurants in the Wichita, Kansas, area.
Spangles’ success couldn’t have happened without a continuing investment in property and equipment. The property and equipment that Spangles owns, such as buildings, hamburger grills, refrigerators, neon lights, and Wurlitzer jukeboxes, create the atmosphere that continues to cause people to say, “Spangles, it just tastes better!”
Spangles, like most businesses that own property and equipment, must make a decision about the type of depreciation method to use. If Spangles wanted to make sure depreciation was calculated in equal amounts each year, which method of depreciation would you suggest? Why? If Spangles expects a piece of equipment to be used up faster than its useful life, what depreciation options would you suggest? Why?