Hot Fried Chicken bought equipment on January 2, 2025, for $39,000. The equipment was expected to remain
Question:
Hot Fried Chicken bought equipment on January 2, 2025, for $39,000. The equipment was expected to remain in service for four years and to operate for 11,000 hours. At the end of the equipment’s useful life, Hot Fried Chicken estimates that its residual value will be $6,000. The equipment operated for 1,100 hours the first year, 3,300 hours the second year, 4,400 hours the third year, and 2,200 hours the fourth year.
Requirements
1. Prepare a schedule of depreciation expense, accumulated depreciation, and book value per year for the equipment under the three depreciation methods: straight-line, unitsof-production, and double-declining-balance. Show your computations.
2. Which method tracks the wear and tear on the equipment most closely?
Step by Step Answer:
Horngrens Financial And Managerial Accounting The Financial Chapters
ISBN: 9780137858651
8th Edition
Authors: Tracie Miller Nobles, Brenda Mattison