E9-9 (Algo) Computing Depreciation under Alternative Methods [LO 9-3]Sonic Corporation purchased and installed electronic payment equipment at its drive-in restaurants in San Marcos, TX, at a cost of$54,000. The equipment has an estimated residual value of $2,700. The equipment is expected to process 271,000 payments over itsthree-year useful life. Per year, expected payment transactions are 65,040, year 1; 149,050, year 2; and 56,910, year 3.Required:Complete a depreciation schedule for each of the alternative methods.1. Straight-line.2. Units-of-production.3. Double-declining-balance.Complete this question by entering your answers in the tabs below.Required 1 Required 2 Required 3Complete a depreciation schedule for the double-declining-balance method. (Do not round intermediate calculations.)IncomeStatementBalance SheetYearDepreciationExpenseCostAccumulatedDepreciationBookValueAtacquisition1$2368,148 $☑ $54,000$ 68,14854,000☑×> $ 54,000< Required 2× × × ×Required 3 >

Double declining balance: Depreciation rate = 1/3years= 0.33333333 * 2 = 0.66666667First…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Sonic Corporation purchased and installed electronic payment equipment at its drive-in restaurants in San Marcos, TX, at a cost of $54,000. The equipment has an estimated residual value of $2,700. The equipment is expected to process 271,000 payments over its three-year useful life. Per year, expected payment transactions are 65,040, year 1; 149,050, year 2; and 56,910, year 3. Required: Complete a depreciation schedule for each of the alternative methods. Straight-line. Units-of-production. Double-declining-balance.
E9-3 (Algo) Determining Financial Statement Effects of an Asset Acquisition and Straight-Line Depreciation [LO 9-2, LO 9-3] O’Connor Company ordered a machine on January 1 at a purchase price of $100,000. On the date of delivery, January 2, the company paid $25,000 on the machine and signed a long-term note payable for the balance. On January 3, it paid $1,000 for freight on the machine. On January 5, O’Connor paid cash for installation costs relating to the machine amounting to $6,000. On December 31 (the end of the accounting period), O’Connor recorded depreciation on the machine using the straight-line method with an estimated useful life of 10 years and an estimated residual value of $10,700. Required: Indicate the effects (accounts, amounts, and + for increase, − for decrease) of each transaction (on January 1, 2, 3, and 5) on the accounting equation. Compute the acquisition cost of the machine. Compute the depreciation expense to be reported for the first year. What should be…

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