Latt On Demand purchased a coffee drink machine on January 1, 2011, for $44,000. Expected...
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Latt On Demand purchased a coffee drink machine on January 1, 2011, for $44,000. Expected useful life is 10 years or 100,000 drinks. In 2011, 3,000 drinks were sold and in 2012, 14,000 drinks were sold. Residual value is $4,000. Under three depreciation methods, annual depreciation and total accumulated depreciation at the end of 2011 and 2012 are as follows: Method A Method B Method Annual Annual Annual Depreciation Accumulated Depreciation Accumulated Depreciation Accumulated Expense Depreciation Expense Depreciation Expense Depreciation $1,200 $1,200 $8,800 $ 8,800 $4,000 $4,000 5,600 6,800 7,040 15,840 4,000 8,000 Year 2011 2012 Requirements 1. Identify the depreciation method used in each instance, and show the equation and computation for each method. (Round to the nearest dollar.) 2. Assume use of the same method through 2013. Compute depreciation expense, accumulated depreciation, and net book value for 2011-2013 under each method, assuming 12,000 drinks were sold in 2013
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