Question
Comparing three depreciation methods Dexter Industries purchased packaging equipment on January 8 for $90,000. The equipment was expected to have a useful life of three
Comparing three depreciation methods
Dexter Industries purchased packaging equipment on January 8 for $90,000. The equipment was expected to have a useful life of three years, or 22,500 operating hours, and a residual value of $4,500. The equipment was used for 9,000 hours during Year 1, 6,750 hours in Year 2, and 6,750 hours in Year 3.
Required:
1. Determine the amount of depreciation expense for the three 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 three years by each method. Round the final answers for each year to the nearest whole dollar.
Year | Straight-line method | Units of activity method | double balancing line method | |
year 1 | $ | $ | $ | |
year 2 | $ | $ | $ | |
year 3 | $ | $ | $ | |
total | $ | $ | $ |
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