Comparing Three Depreciation Methods

Dexter Industries purchased packaging equipment on January 8 for $431,600. The equipment was expected to have a useful life of three years, or 6,000 operating hours, and a residual value of $35,600. The equipment was used for 2,400 hours during Year 1, 1,860 hours in Year 2, and 1,740 hours in Year 3.

Required:

1. Determine the amount of depreciation expense for the three years ending December 31, Year 1, Year 2, Year 3, 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 three years by each method.

Note: For all methods, 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	$fill in the blank 1		$fill in the blank 2		$fill in the blank 3
Year 2	$fill in the blank 4		$fill in the blank 5		$fill in the blank 6
Year 3	$fill in the blank 7		$fill in the blank 8		$fill in the blank 9
Total	$fill in the blank 10		$fill in the blank 11		$fill in the blank 12

2. What method yields the highest depreciation expense for Year 1?

Straight-line methodUnits-of-Activity methodDouble-declining-balance methodAll three depreciation methodsDouble-declining-balance method

3. What method yields the most depreciation over the three-year life of the equipment?

Straight-line methodUnits-of-Activity methodDouble-declining-balance methodAll three depreciation methodsAll three depreciation methods