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Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $1,035,600. The equipment was expected to have a useful life of four
Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $1,035,600. The equipment was expected to have a useful life of four years, or 10,000 operating hours, and a residual value of $85,600. 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 $ Year 2 $ $ $ Year 3 Year 4 Total 2. What method yields the highest depreciation expense for Year 1
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