E$7-8($Algo$)$ Computing Depreciation under Alternative Methods L$07-3$

Homy Ice Cream Company bought a new ice cream maker at the beginning of the year at a cost of $$8,000.$ The estimated useful life

was four years, and the residual value was $$900.$ Assume that the estimated productive life of the machine was $10,000$ hours. Actual

annual usage was $3,700$ hours in year $1$; $3,000$ hours in year $2$; $2,100$ hours in year $3$; and $1,200$ hours in year $4.$

Required:

$1-$a$.$ Complete a separate depreciation schedule by using Straight$-$line method. $($Round your answers to the nearest dollar amount.

Make sure that the carrying amount at the end of year $4$ is equal to the residual value. Depreciation expense for the last period

should be calculated as Carrying value of $3$ rd year minus residual value.$)$

$1-$b$.$ Complete a separate depreciation schedule by using Units$-$of$-$production method. $($Round your answers to the nearest dollar

amount. Make sure that the carrying amount at the end of year $4$ is equal to the residual value. Depreciation expense for the last

period should be calculated as Carrying value of $3$ rd year minus residual value.$)$

$1-$c$.$ Complete a separate depreciation schedule by using Double$-$declining$-$balance method. $($Round your answers to the nearest

dollar amount. Make sure that the carrying amount at the end of year $4$ is equal to the residual value. Depreciation expense for

the last period should be calculated as Carrying value of $3$ rd year minus residual value.$)$