Comparing Three Depreciation Methods

Dexter Industries purchased packaging equipment on January 8 for $512,400. The equipment was expected to have a useful life of four years, or 10,000 operating hours, and a residual value of $42,400. The equipment was used for 3,500 hours during Year 1, 2,100 hours in Year 2, 2,800 hours in Year 3, and 1,600 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		Units-of-Activity Method		Double-Declining- Balance Method
Year 1	$117,500		$164,500		$256,200
Year 2	$117,500		$98,700		$128,100
Year 3	$117,500		$131600		$64050
Year 4	$117,500		$75200		$?
Total	$470,000		$470000		$470,000

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