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Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $599,600. The equipment was expected to have a useful life of four

Comparing Three Depreciation Methods

Dexter Industries purchased packaging equipment on January 8 for $599,600. The equipment was expected to have a useful life of four years, or 10,000 operating hours, and a residual value of $49,600. 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 $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
Year 4 $fill in the blank 10 $fill in the blank 11 $fill in the blank 12
Total $fill in the blank 13 $fill in the blank 14 $fill in the blank 15

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

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

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

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

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