Sonic Corporation purchased and installed electronic payment equipment at its drive-in restaurants in San Marcos, TX, at a cost of $32,400. The equipment has an estimated residual value of $1,500. The equipment is expected to process 258,000 payments over its three-year useful life. Per year, expected payment transactions are 61,920, year 1; 141,900, year 2; and 54,180, year 3. Required: Complete a depreciation schedule for each of the alternative methods. Straight-line. Units-of-production. Double-declining-balance. Required 1 Complete a depreciation schedule for the straight-line method. (Do not round intermediate calculations.) Income Statement Year Required 2 Required 3 At acquisition 1 2 3 Depreciation Expense Cost Balance Sheet Accumulated Depreciation Book Value

Sonic Corporation purchased and installed electronic payment equipment at its drive-in restaurants in San Marcos, TX, at a cost of $32,400. The equipment has an estimated residual value of $1,500. The equipment is expected to process 258,000 payments over its three-year useful life. Per year, expected payment transactions are 61,920, year 1; 141,900, year 2; and 54,180, year 3. Required: Complete a depreciation schedule for each of the alternative methods. Straight-line. Units-of-production. Double-declining-balance. Required 1 Complete a depreciation schedule for the straight-line method. (Do not round intermediate calculations.) Income Statement Year Required 2 Required 3 At acquisition 1 2 3 Depreciation Expense Cost Balance Sheet Accumulated Depreciation Book Value

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Crane Company manufactures a check-in kiosk with an estimated economic life of 12 years and leases it to Cheyenne Airlines for a period of 10 years. The normal selling price of the equipment is $252,640, and its unguaranteed residual value at the end of the lease term is estimated to be $21,300. Cheyenne will pay annual payments of $37,500 at the beginning of each year. Crane incurred costs of $173,900 in manufacturing the equipment and $3,900 in sales commissions in closing the lease. Crane has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 11%. Cheyenne Airlines has an incremental borrowing rate of 11%. Click here to view factor tables. (a) Your Answer Correct Answer (Used) Your answer is correct. Discuss the nature of this lease in relation to the lessee. This is a finance lease Compute the amount of the initial lease liability. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer…