Typewritten answers only, please. No handwritten answers. At the beginning of 20

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Typewritten answers only, please. No handwritten answers.

At the beginning of 2018, Copeland Drugstore purchased a new computer system for $260,000. It is expected to have a five-year life and a $40,000 salvage value.

Record the purchase of the computer system and the depreciation expense for the first year under straight-line and double-declining-balance methods in a financial statements model like the following one. (In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), a financing activity (FA) and net change in cash (NC). The letters NA indicate that an element is not affected by the event. Enter any decreases to account balances and cash outflows with a minus sign.)

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Explanation / Answer

Cash Book value Revenue Expense Cash flow Purchase of equipment -260000 260000 -260000 Investing Straight line depreciation = (260000-40000)/5 -40000 -40000 NA Double decling method = 260000*2*1/5*100 -104000 -104000 NA

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