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Comparing Three Depreciation Methds Dexter Industries purchased packaging equipment on January 8 for $1,043,000. The equipment was expected to have a useful life of four
Comparing Three Depreciation Methds Dexter Industries purchased packaging equipment on January 8 for $1,043,000. The equipment was expected to have a useful life of four years, or 10,400 operating hours, and a residual value of $86,200. The equipment was used for 3,640 hours during Year 1, 2,184 hours in Year 2, 2,912 hours in Year 3, and 1,664 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 doubledeclining-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. 2. What method yields the highest depreciation expense for Year 1? 3. What method yields the most depreciation over the four-year life of the equipment
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