Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $796,600. The equipment...
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Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $796,600. The equipment was expected to have a useful life of four years, or 8,400 operating hours, and a residual value of $65,800. The equipment was used for 2,940 hours during Year 1, 1,764 hours in Year 2, 2,352 hours in Year 3, and 1,344 hours in Year 4. Required: 1. Determine the amount of depreciation expense for the four years ending December 31 by (a) the straight-line method, (b) the units-of-activity method, and (c) the double- declining-balance method. Also determine the total depreciation expense for the four years by each method. Round the answer for each year to the nearest whole dollar. Depreciation Expense Year Straight-Line Method Year 1 $ Year 2 $ Year 3 Year 4 Units-of-Activity Double-Declining- Method Balance Method Total 2. What method yields the highest depreciation expense for Year 1? Double-declining-balance method 3. What method yields the most depreciation over the four-year life of the equipment? All three depreciation methods Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $796,600. The equipment was expected to have a useful life of four years, or 8,400 operating hours, and a residual value of $65,800. The equipment was used for 2,940 hours during Year 1, 1,764 hours in Year 2, 2,352 hours in Year 3, and 1,344 hours in Year 4. Required: 1. Determine the amount of depreciation expense for the four years ending December 31 by (a) the straight-line method, (b) the units-of-activity method, and (c) the double- declining-balance method. Also determine the total depreciation expense for the four years by each method. Round the answer for each year to the nearest whole dollar. Depreciation Expense Year Straight-Line Method Year 1 $ Year 2 $ Year 3 Year 4 Units-of-Activity Double-Declining- Method Balance Method Total 2. What method yields the highest depreciation expense for Year 1? Double-declining-balance method 3. What method yields the most depreciation over the four-year life of the equipment? All three depreciation methods
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Comparing Three Depreciation Methods 1 Depreciation Expense a StraightLine Method Depreciable cost 7... View the full answer
Related Book For
Corporate Financial Accounting
ISBN: 978-1305653535
14th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
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