Ch 08 Tableau-3Log In to CanvasMyEagle8 Tableau-3 iTableau DA 8-3: Mini-Case, Analyzing straight-line, units-of-prod uction, and double-declining-balanceLO P11The company founder hires us as consultants and asks that we oversee the accounting for new equipment purchased on January 1.The founder wants to know the implications of different depreciation methods and estimates for the company's financial statements.Those statements will be used to attract financing from new investors and creditors. At the end of the equipment's first year inoperation, we are given the following Tableau Dashboard.tsPurchase Price & Estimated SalvageValueEstimated Useful Life ofAssetsеВookTruckEquipmentBuilding20Print$70,000eferences16$60,000$50,00012$40,000$30,0008$20,0004$10,000$00Purchase Salvage Purchase Salvage Purchase SalvagePriceValuePriceBuildingTruckValuePriceEquipmentValueActual & Estimated Units-of-ProductionYear 1 ProductionActualYear 2 ProductionEstimatedYear 2 Production: 55,000 unitsYear 3 ProductionEstimatedYear 4 ProductionEstimated025,00050,00075,000100,000125,000Total Units to be Producedableauk-rawYears Ch 08 Tableau-3Log In to CanvasMyEagleableau-3iActual & Estimated Units-of-ProductionActualYear 1 ProductionEstimatedYear 2 ProductionEstimatedYear 3 ProductionesEstimatedYear 4 Production125,000100,00075,00050,00025,0000Total Units to be Producedk--ableau1(a). Determine the equipment's first-year depreciation under the straight-line method.1(b). Determine the equipment's first-year depreciation under the units-of-production method. Note: Actual units produced for Year 1were equal to the units estimated to be produced for Year 11(c). Determine the equipment's first-year depreciation under the double-declining-balance method.2. Which method in part 1 results in the highest net income in the first year?3. If the company anticipates that its use of assets will vary greatly from one year to the next based on usage, which method would werecommend the company use?4. The founder is concerned that a depreciation method might result in more total depreciation expense over the useful life of an assetthan another method. Which method would result in the highest amount of depreciation over an asset's useful life?Complete this question by entering your answers in the tabs below.Required 1ARequired 1BRequired 1CRequired 2Required 4Required 3Determine the equipment's first-year depreciation under the straight-line method.Straight-Line MethodAnnual DepreciationExpenseChoose Numerator:Choose Denominator:/Depreciation expense/IIII

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Ch 08 Tableau-3
Log In to Canvas
MyEagle
8 Tableau-3 i
Tableau DA 8-3: Mini-Case, Analyzing straight-line, units-of-prod uction, and double-declining-balance
LO P1
1
The company founder hires us as consultants and asks that we oversee the accounting for new equipment purchased on January 1.
The founder wants to know the implications of different depreciation methods and estimates for the company's financial statements.
Those statements will be used to attract financing from new investors and creditors. At the end of the equipment's first year in
operation, we are given the following Tableau Dashboard.
ts
Purchase Price & Estimated Salvage
Value
Estimated Useful Life of
Assets
еВook
Truck
Equipment
Building
20
Print
$70,000
eferences
16
$60,000
$50,000
12
$40,000
$30,000
8
$20,000
4
$10,000
$0
0
Purchase Salvage Purchase Salvage Purchase Salvage
Price
Value
Price
Building
Truck
Value
Price
Equipment
Value
Actual & Estimated Units-of-Production
Year 1 Production
Actual
Year 2 Production
Estimated
Year 2 Production: 55,000 units
Year 3 Production
Estimated
Year 4 Production
Estimated
0
25,000
50,000
75,000
100,000
125,000
Total Units to be Produced
ableau
k-
raw
Years
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Ch 08 Tableau-3 Log In to Canvas MyEagle 8 Tableau-3 i Tableau DA 8-3: Mini-Case, Analyzing straight-line, units-of-prod uction, and double-declining-balance LO P1 1 The company founder hires us as consultants and asks that we oversee the accounting for new equipment purchased on January 1. The founder wants to know the implications of different depreciation methods and estimates for the company's financial statements. Those statements will be used to attract financing from new investors and creditors. At the end of the equipment's first year in operation, we are given the following Tableau Dashboard. ts Purchase Price & Estimated Salvage Value Estimated Useful Life of Assets еВook Truck Equipment Building 20 Print $70,000 eferences 16 $60,000 $50,000 12 $40,000 $30,000 8 $20,000 4 $10,000 $0 0 Purchase Salvage Purchase Salvage Purchase Salvage Price Value Price Building Truck Value Price Equipment Value Actual & Estimated Units-of-Production Year 1 Production Actual Year 2 Production Estimated Year 2 Production: 55,000 units Year 3 Production Estimated Year 4 Production Estimated 0 25,000 50,000 75,000 100,000 125,000 Total Units to be Produced ableau k- raw Years

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Ch 08 Tableau-3
Log In to Canvas
MyEagle
ableau-3i
Actual & Estimated Units-of-Production
Actual
Year 1 Production
Estimated
Year 2 Production
Estimated
Year 3 Production
es
Estimated
Year 4 Production
125,000
100,000
75,000
50,000
25,000
0
Total Units to be Produced
k-
-
ableau
1(a). Determine the equipment's first-year depreciation under the straight-line method.
1(b). Determine the equipment's first-year depreciation under the units-of-production method. Note: Actual units produced for Year 1
were equal to the units estimated to be produced for Year 1
1(c). Determine the equipment's first-year depreciation under the double-declining-balance method.
2. Which method in part 1 results in the highest net income in the first year?
3. If the company anticipates that its use of assets will vary greatly from one year to the next based on usage, which method would we
recommend the company use?
4. The founder is concerned that a depreciation method might result in more total depreciation expense over the useful life of an asset
than another method. Which method would result in the highest amount of depreciation over an asset's useful life?
Complete this question by entering your answers in the tabs below.
Required 1A
Required 1B
Required 1C
Required 2
Required 4
Required 3
Determine the equipment's first-year depreciation under the straight-line method.
Straight-Line Method
Annual Depreciation
Expense
Choose Numerator:
Choose Denominator:
/
Depreciation expense
/
<Required 1A
Required 1B >
II
II
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Ch 08 Tableau-3 Log In to Canvas MyEagle ableau-3i Actual & Estimated Units-of-Production Actual Year 1 Production Estimated Year 2 Production Estimated Year 3 Production es Estimated Year 4 Production 125,000 100,000 75,000 50,000 25,000 0 Total Units to be Produced k- - ableau 1(a). Determine the equipment's first-year depreciation under the straight-line method. 1(b). Determine the equipment's first-year depreciation under the units-of-production method. Note: Actual units produced for Year 1 were equal to the units estimated to be produced for Year 1 1(c). Determine the equipment's first-year depreciation under the double-declining-balance method. 2. Which method in part 1 results in the highest net income in the first year? 3. If the company anticipates that its use of assets will vary greatly from one year to the next based on usage, which method would we recommend the company use? 4. The founder is concerned that a depreciation method might result in more total depreciation expense over the useful life of an asset than another method. Which method would result in the highest amount of depreciation over an asset's useful life? Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 1C Required 2 Required 4 Required 3 Determine the equipment's first-year depreciation under the straight-line method. Straight-Line Method Annual Depreciation Expense Choose Numerator: Choose Denominator: / Depreciation expense / <Required 1A Required 1B > II II

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Expert Answer

Step 1

Straight-line depreciation method:

The depreciation method which assumes that the consumption of economic benefits of long-term asset could be distributed equally throughout the useful life of the asset, is referred to as straight-line method.

Depreciation expense:

Depreciation expense is a non-cash expense, which is recorded on the income statement reflecting the consumption of economic benefits of long-term asset.

Step 2

Determine the equipment first year depreciation ...

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Annual Depreciation Expense Cost of equipment -Salvage value of Equipment Estimated useful life $40,000-S10,000 4years S30,000 4 years S7,500

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