Reference no: EM132493625

On January 1, 2015, Cape Breton Olive Oil purchased a new bottling system. The system has an expected life of 5 years. The system cost $325,000. Shipping, installation, and set up was an additional $35,000. At the end of the useful life, the Chief Accountant for Cape Breton Olive Oil expects to dispose (salvage value) of the bottling system for $26,000. She further anticipates total output of 668,000 bottles over the systems useful life.

Required

Question a. Using the straight-line depreciation method, give a schedule showing annual depreciation expense, accumulated depreciation, and any related calculations for each year.

Question b. Using the units-of-production depreciation method, give a schedule showing annual depreciation expense, accumulated depreciation, and any related calculations for each year. Actual production, in bottles, was 108,000 (2015), 130,000 (2016), 150,000 (2017), and 160,000 (2018), and X? for 2019. You need to determine X.

Question c. Using the double-declining method, give a schedule showing annual depreciation expense, accumulated depreciation and any related calculations for each year.

Question d. Using the straight-line method, prepare revised depreciation calculations if the useful life estimate was revised at the beginning of 2017, to anticipate a remaining useful life of 4 additional years (making the total life of the asset 6 years). The revised useful life was accompanied by a change in estimated salvage value to $34,400.