Nicole’s Getaway Spa (NGS) purchased a hydrotherapy tub system to add to the wellness programs at...

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Accounting

Nicole’s Getaway Spa (NGS) purchased a hydrotherapy tub systemto add to the wellness programs at NGS. The machine was purchasedat the beginning of the year at a cost of $9,500. The estimateduseful life was five years and the residual value was $500. Assumethat the estimated productive life of the machine is 10,000 hours.Expected annual production was year 1, 2,200 hours; year 2, 2,300hours; year 3, 2,400 hours; year 4, 2,100 hours; and year 5, 1,000hours.
Assume NGS sold the hydrotherapy tub system for $2,850 at theend of year 3.The following amounts were forecast for year 3: SalesRevenues $43,000; Cost of Goods Sold $34,000; Other OperatingExpenses $4,300; and Interest Expense $900. Create an incomestatement for year 3 for each of the different depreciationmethods, ending at Income before Income Tax Expense. (Don't forgetto include a loss or gain on disposal for each method.).

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Nicoles Getaway Spa NGS purchased Amnt Amnt The Machine was purchased at start of the year Cost 9500 The estimated useful life at 5 Year 500 Net Asset value after salvage 9000 Number of year useful 5 Yearly Depreciation amount 90005 year 1800 Under Straight Line depreciation Depreciation amount 1800 Year Depreciation Accumulated Depreciation Book Value Working for Book value Working for Accumulated Dep Purchase 9500 1 1800 1800 7700 95001800 1800 2 1800 3600 5900 See Answer

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