applies to the questions displayed below.]Nicole's Getaway Spa (NGS) purchased a hydrotherapy tub system to add to the wellness programs at NGS. The machinewas purchased at the beginning of the year at a cost of $15,500. The estimated useful life was five years and the residualvalue was $1,500. Assume that the estimated productive life of the machine is 10,000 hours. Expected annual productionwas year 1, 2,350 hours; year 2, 2,500 hours; year 3, 2,050 hours; year 4, 2,100 hours; and year 5, 1,000 hours.3. Assume NGS sold the hydrotherapy tub system for $4,650 at the end of year 3. The following amounts were forecast for year 3:Sales Revenues $52,000; Cost of Goods Sold $41,000; Other Operating Expenses $4,500; and Interest Expense $700. Create anincome statement for year 3 for each of the different depreciation methods, ending at Income before Income Tax Expense. (Don'tforget to include a loss or gain on disposal for each method.). (Do not round intermediate calculations. Round your answers to thenearest dollar amount.)Operating Expenses:NICOLE'S GETAWAY SPA(Forecasted) Income StatementFor the Year Ended Year 3Straight-Line+Units-of-ProductionDouble-DecliningBalance000

Niole's Getaway SpaINCOME STATEMENT FOR YEAR 3 Straight-Line Depreciation(Units-of-Production…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Nicole’s Getaway Spa (NGS) purchased a hydrotherapy tub system to add to the wellness programsat NGS. The machine was purchased at the beginning of the year at a cost of $7,000. The estimateduseful life was five years and the residual value was $500. Assume that the estimated productivelife of the machine is 13,000 hours. Expected annual production was year 1, 3,100 hours; year 2,2,500 hours; year 3, 3,400 hours; year 4, 2,200 hours; and year 5, 1,800 hours.Required:1. Complete a depreciation schedule for each of the alternative methods.a. Straight-line.b. Units-of-production.c. Double-declining-balance.2. Assume NGS sold the hydrotherapy tub system for $2,100 at the end of year 3. Prepare the journal entry to account for the disposal of this asset under the three differentmethods.3. The following amounts were forecast for year 3: Sales Revenues $42,000; Cost of GoodsSold $33,000; Other Operating Expenses $4,000; and Interest Expense $800. Create anincome statement for year 3 for each…
Required information [The following information applies to the questions displayed below.) Nicole's Getaway Spa (NGS) purchased a hydrotherapy tub system to add to the wellness programs at NGS. The machine was purchased at the beginning of the year at a cost of $8.500. The estimated useful life was five years and the residual value was $500. Assume that the estimated productive life of the machine is 10,000 hours. Expected annual production was year 1, 2,250 hours; year 2, 2,350 hours; year 3, 2,300 hours, year 4, 2,100 hours; and year 5, 1,000 hours. 3. Assume NGS sold the hydrotherapy tub system for $2.550 at the end of year 3. The following amounts were forecast for year 3: Sales Revenues $44,000; Cost of Goods Sold $34,000; Other Operating Expenses $4,400, and Interest Expense $900. Create an income statement for year 3 for each of the different depreciation methods, ending at Income before Income Tax Expense. (Don't forget to include a loss or gain on disposal for each method.).…
Required information [The following information applies to the questions displayed below.] Nicole's Getaway Spa (NGS) purchased a hydrotherapy tub system to add to the wellness programs at NGS. The machine was purchased at the beginning of the year at a cost of $16,000. The estimated useful life was five years and the residual value was $1,000. Assume that the estimated productive life of the machine is 10,000 hours. Expected annual production was year 1, 2,400 hours; year 2, 2,300 hours; year 3, 2,200 hours; year 4, 2,100 hours; and year 5, 1,000 hours. 3. Assume NGS sold the hydrotherapy tub system for $4,800 at the end of year 3. The following amounts were forecast for year 3: Sales Revenues $53,000; Cost of Goods Sold $41,000; Other Operating Expenses $5,300; and Interest Expense $1,100. Create an income statement for year 3 for each of the different depreciation methods, ending at Income before Income Tax Expense. (Don't forget to include a loss or gain on disposal for each…
Required information [The following information applies to the questions displayed below.] Nicole's Getaway Spa (NGS) purchased a hydrotherapy tub system to add to the wellness programs at NGS. The machine was purchased at the beginning of the year at a cost of $8,500. The estimated useful life was five years and the residual value was $500. Assume that the estimated productive life of the machine is 10,000 hours. Expected annual production was year 1, 2,250 hours, year 2, 2,350 hours: year 3, 2,300 hours; year 4. 2.100 hours; and year 5, 1,000 hours. Required: 1. Complete a depreciation schedule for each of the alternative methods. a. Straight-line. b. Units-of-production. c. Double-declining-balance Complete this question by entering your answers in the tabs below. Req 1A Req 1C Complete a depreciation schedule for straight-line method. (Do not round intermediate calculations. Round your final answers to the nearest dollar amount.) Req 18 Year At Acquisition Year 1 Year 2 Year 3 Year…
Required information [The following information applies to the questions displayed below. Nicole's Getaway Spa (NGS) purchased a hydrotherapy tub system to add to the wellness programs at NGS. The machine was purchased at the beginning of the year at a cost of $8,500. The estimated useful life was five years and the residual value was $500. Assume that the estimated productive life of the machine is 10,000 hours. Expected annual production was year 1, 2,250 hours: year 2, 2,350 hours; year 3, 2,300 hours: year 4, 2.100 hours; and year 5, 1,000 hours. Required: 1. Complete a depreciation schedule for each of the alternative methods. a. Straight-line. b. Units-of-production.. c. Double-declining-balance.
Required information. [The following information applies to the questions displayed below] University Car Wash purchased new soap dispensing equipment that cost $231,000 including installation. The company estimates that the equipment will have a residual value of $25,500. University Car Wash also estimates it will use the machine for six years or about 12,500 total hours. Actual use per year was as follows: Year 1 Hours Used 2,900 2 1,800 3 1,900 4 2,100 5 6 1,900 1,900 2. Prepare a depreciation schedule for six years using the double-declining-balance method. (Do not round your intermediate calculations.) UNIVERSITY CAR WASH Depreciation Schedule-Double-Declining-Balance End of Year Amounts Depreciation Year Expense 1 2 3 4 5 Accumulated Depreciation Book Value
The following information applies to the questions displayed below.) University Car Wash built a deluxe car wash across the street from campus. The new machines cost $264,000, including installation. The company estimates that the equipment will have a residual value of $25,500. University Car Wash also estimates it will use the machine for six years or about 12,500 total hours. Actual use per year was as follows: Year Hours Used 12,900 2 1,300 3 1,400 4 2,600 5 2,400 6 1,900 2. Prepare a depreciation schedule for six years using the double-declining-balance method. Note: Do not round your intermediate calculations.
University Car Wash built a deluxe car wash across the street from campus. The new machines cost $228,000 including installation. The company estimates that the equipment will have a residual value of $24,000. University Car Wash also estimates it will use the machine for six years or about 12,000 total hours, actual use per year as follows: 1 year 3,000 hours; 2 years 1,700 hours; 3 years, 1,800 hours, 4 years 2,200 hours 5 years 2,000 hours 6 years 1,300 hours. Prepare depreciation schedule for 6 years using the activity based method
[The following information applies to the questions displayed below.]Cheetah Copy purchased a new copy machine. The new machine cost $140,000 including installation. The company estimates the equipment will have a residual value of $35,000. Cheetah Copy also estimates it will use the machine for four years or about 8,000 total hours. Actual use per year was as follows: Year Hours Used 1 3,000 2 2,000 3 2,000 4 2,000 2. Prepare a depreciation schedule for four years using the double-declining-balance method. (Hint: The asset will be depreciated in only two years.) (Do not round your intermediate calculations.) Please do a depreciation schdeule in double declining balance method witrh a coulumn for year 1-4 with total on bottom and end of year amounts for each year with a column for depreciation expense and accumulated deprecaiton and book value. Thanks a lot.
University Car Wash purchased new soap dispensing equipment that cost $234,000 including installation. The company estimates that the equipment will have a residual value of $27,000. University Car Wash also estimates it will use the machine for six years or about 12,000 total hours. Actual use per year was as follows: Year Hours Used 1 2,800 2 1,900 3 2,000 4 2,000 5 1,800 6 1,500 Required: 1. Prepare a depreciation schedule for six years using the straight-line method. (Do not round your intermediate calculations.)
[The following information applies to the questions displayed below.] Quick Copy purchased a new copy machine. The new machine cost $106,000 including installation. The company estimates the equipment will have a residual value of $26,500. Quick Copy also estimates it will use the machine for four years or about 8,000 total hours. Actual use per year was as follows: Year Hours Used 1 2,800 2 2,000 3 2,000 4 3,200 Problem 7-5B (Algo) Part 3 3. Prepare a depreciation schedule for four years using the activity-based method. (Round your "Depreciation Rate" to 3 decimal places and use this amount in all subsequent calculations. Round answers to the nearest whole dollar.) > Answer is complete but not entirely correct. QUICK COPY Depreciation Schedule-Activity-Based End of Year Amounts Depreciation Accumulated Year 1 Book Value Expense Depreciation $ 27,825 $ 27,825 $ 78,175 2 19,876 47,700 58,325 X 3 19,876 67,575 38,450 x 4 31,800 x 99,375 5,125 x Total $ 99,377
A small chemical manufacture company needs to replace an old high-shear mixer. Two different models have been proposed. • Model A costs $250,000 for purchasing and installation. The model has service life of 6 years and at the end of the sixth year has estimated salvage value of $50,000. The model in the first year has an operational and malntenance (O&M) cost of $24,000 and the cost increases each year by 5% over the previous year's O&M cost. • Model B costs $175,000 for purchasing and installation. The model has service life of 3 years and at the end of the third year has estimated salvage value of $30,000. The model in the first year has an operational and maintenance (O&M) cost of $11,000 and the cost increases cach year by 7% over the previous year's O&M cost. If the company has MARR of 10%, select the correct statement. O Select Model A because it has annual equivalent cost of $77,764 which is less than Model B O Select Model B because it has annual equivalent cost of $73,044…

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