SERIAL PROBLEM: KATE'S CARDS

$($Note: This is a continuation of the Serial Problem: Kate's Cards from Chapters $1$ through $8.)$

SP$9.$ Kate's business is growing faster than she had predicted. In order to keep up$,$ she will need to purchase

improved computer hardware. Kate has learned that the software that she uses runs much faster if her

computer has a lot of memory. In addition, her files are very large and she is running out of free space

on her existing hard drive. Finally, Kate has heard horror stories about hard disk drive crashes and the

possibility that all of her work will be destroyed. In order to protect against this possibility, she has

decided to invest in a large commercial grade backup system.

The cost of the memory and hard disk drive upgrade to Kate's computer will total $$420.$ The cost

of the backup system is $$3,000.$ The memory and hard disk upgrade will increase the productivity of

Kate's current computer; however, it will not extend its useful life. The backup system is expected to

have a five$-$year useful life.

Kate would like to know the following items:

How should the expenditure for the memory and hard disk drive upgrade be recorded? Provide the

journal entry.

Kate's current computer has $42$ months remaining for depreciation purposes $($under the straight$-$line

method$).$ The original cost of the computer was $$4,800$ and had a four$-$year useful life. The current

monthly depreciation is $$100.$ How will this current expenditure affect the monthly depreciation?

Kate would like to know how depreciation on the backup system under both the straight$-$line method

and the double$-$declining method differ. She is assigning a $$500$ salvage value to the equipment.

Construct a table showing yearly depreciation under both methods.