Reference no: EM132426688
Question - House of Bagels company purchased a brand new shiny bagel oven for $370,000. The oven was shipped from Mexico at a cost of $45,000 and while importing it, House of Bagels paid $7,000 in customs levies. The oven was secured to the building foundation at a cost of $20,000 and $8,000 was spent testing the oven for quality production. It is estimated that the machine will have a $50,000 salvage value at the end of its 4-year useful service life. The maximum estimated bagel production is 1,000,000 bagels: 400,000 in year one, 300,000 in year two, 200,000 in year three, and 100,000 in year four, respectively.
Need help to compute the total cost, the using the straight line and units of activity methods, prepare a schedule that shows the 1) annual depreciation expense, 2) annual accumulated depreciation, and 3) net book value on the machine for each of the years in its 4-year life.