Answer:
Sushi Corp.
Depreciation Schedule:
Income Statement Balance Sheet
Year Depreciation Expense Cost Accumulated Book Value
Depreciation
At acquisition $51,300
Straight-line method:
1 $16,200 $51,300 $16,200 $35,100
2 $16,200 $51,300 $32,400 $18,900
3 $16,200 $51,300 $48,600 $2,700
Units-of-production method:
1 $11,664 $51,300 $11,664 $39,636
2 $26,730 $51,300 $38,394 $12,906
3 $10,206 $51,300 $48,600 $2,700
Double-declining-balance method:
1 $34,371 $51,300 $34,371 $16,929
2 $11,342 $51,300 $45,713 $5,587
3 $2,887 $51,300 $48,600 $2,700
Explanation:
a) Data and Calculations:
Cost of electronic payment equipment = $51,300
Residual value = $2,700
Depreciable amount = $48,600 ($51,300 - $2,700)
Volume of payments = 275,000
Useful life = 3 years
Year 1 expected payment transaction = 66,000
Year 2 expected payment transaction = 151,250
Year 3 expected payment transaction = 57,750
b) Straight-line method:
Depreciation expense per year = $16,200 ($48,600/3)
b) Units-of-production method:
Depreciation expense per:
Year 1 = 66,000/275,000 * $48,600 = $11,664
Year 2 = 151,250/275,000 * $48,600 = $26,730
Year 3 = 57,750/275,000 * $48,600 = $10,206
c) Double-declining-balance method:
Depreciation rate = 100/3 * 2 = 67%
Depreciation expense per:
Year 1 = $51,300 * 67% = $34,371
Year 2 = $16,929 * 67% = 11,342
Year 3 = $2,887 ($5,587 - $2,700)
