Nicole\'s Getaway Spa (NGS) purchased a hydrotherapy tub system to add to the we

Question

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 $10,500. 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, 2,450 hours; yeer 2,2.300 hours; year 3, 2,150 hours; year 4, 2,100 hours; and year 5,1,000 hours. value: 0.90 points Required 1. Complete a depreciation schedule for each of the altermative methods. (Do not round intermediate calculations. Round your final answers to the nearest dollar amount) a. Straight-line. Depreciation Accumulated Year Book Value Expense De 10.500 8.500 6,500 4.500 2,500 500 At Acquisition Year 1 Year 2 Year 3 Year 4 Year 5 O0U 2,000 S 2,000 $ 2,000 s 2,000 s 2000 S 4,000 S 6,000 s 8,000 S 10,000 S Depreciation Accumulated Book Value Year At Acquisition Year 1 Year 2 Year 3 Year 4 Year 5 2,450 $ 2,300 $ 2,150 $ 2,100 S 1,000r $ 2,450 $ 4,750 s 6,900 $ 9,000$ 10,000 $ 10,500 8,050 5,750 3,600 1,500 500

Explanation / Answer

Nicole's Getaway SPA

(Forecasted) Income Statement

for the Year ended 3

Particulars Straight Line Units of production Double declining balance Sales revenue 48,000 48,000 48,000 Cost of goods sold 37,000 37,000 37,000 Gross Income(a) 11,000 11,000 11,000 Operating Expenses: Depriciation expense 2,000 2,150 1,512 Other operating expenses 4,800 4.800 4.800 Total operating expenses(b) 6,800 6,950 6,312 Operating income(a-b)=c 4,200 4,050 4,688 Non Operating expenses: Interest expense 1,000 1,000 1,000 Loss on disposal of machine 1,350 450 - Total non operating Expense(d) 2,350 1,450 1,000 Gain on disposal of machine(e) - - 882 Income before income tax expense(c+e-d) 1,850 2,600 4,570

Related Questions

Navigate

• Browse (All)
• Browse N
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.