ACC 308 7-1 Final Project Submission: Notes to Financial Statements

Managing Depreciation To calculate the depreciation of Peyton Approved’s equipment I utilized the straight-line method which is calculated by equally distributing the depreciation throughout the asset’s depreciable life. For 2017 Payton Approved’s baking equipment cost $12,000 with an accumulated depreciation equaling $406.44 a year totaling $2032.20 over a five-year period. As shown on the Pro Forma Income Statement and Pro Forma Balance Sheets, depreciation for the new location is estimated at $2,142.86. To manage depreciation, Peyton Approved’s new location should adopt the same method as the current location to ensure that shareholders, investors and management can easily compare the depreciation of equipment evenly amongst all locations.