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Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $286,800. The equipment was expected to have a useful life of four
Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $286,800. The equipment was expected to have a useful life of four years, or 5,600 operating hours, and a residual value of $23,600. The equipment was used for 1,960 hours during Year 1, 1,176 hours in Year 2, 1,568 hours in Year 3, and 896 hours in Year 4. 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 four years by each method. Round the answer for each year to the nearest whole dollar. Depreciation Expense Units-of-Activity Straight-Line Method Method Year Double-Declining- Balance Method Year 1 $ 65,800 14,770 x 143,400 Year 2 65,800 8,862 X $ 71,700 Year 3 $ $ $ $ 65,800 $ $ $ 11,816 X $ $ $ 35,850 Year 4 65,800 6,752 X 17,925 x Total 263,200 42,200 x $ 268,875 x 2. What method yields the highest depreciation expense for Year 1? Double-declining-balance method 3. What method yields the most depreciation over the three-year life of the equipment? Double-declining-balance method X Check My Work Omore Check My Work uses remaining. Previous Next
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