Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $187,000. The equipment...
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Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $187,000. The equipment was expected to have a useful life of four years, or 5,200 operating hours, and a residual value of $15,400. The equipment was used for 1,820 hours during Year 1, 1,092 hours in Year 2, 1,456 hours in Year 3, and 832 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. Year Year 1 Year 2 Year 3 Year 4 Total Depreciation Expense Straight-Line Method A LA A SA A 42,900 42,900 42,900 42,900 171,600 Units-of-Activity A SA A SA SA Method 60,060 36,036 48,048 27,456 171,600 2. What method yields the highest depreciation expense for Year 1? Double-declining-balance method Double-Declining- Balance Method 93,500 A LA A 3. What method yields the most depreciation over the four-year life of the equipment? All three depreciation methods A $ LA Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $187,000. The equipment was expected to have a useful life of four years, or 5,200 operating hours, and a residual value of $15,400. The equipment was used for 1,820 hours during Year 1, 1,092 hours in Year 2, 1,456 hours in Year 3, and 832 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. Year Year 1 Year 2 Year 3 Year 4 Total Depreciation Expense Straight-Line Method A LA A SA A 42,900 42,900 42,900 42,900 171,600 Units-of-Activity A SA A SA SA Method 60,060 36,036 48,048 27,456 171,600 2. What method yields the highest depreciation expense for Year 1? Double-declining-balance method Double-Declining- Balance Method 93,500 A LA A 3. What method yields the most depreciation over the four-year life of the equipment? All three depreciation methods A $ LA
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Required 1 a StraightLine Method Annual Depreciation Expense Cost Residual Value Useful Life 187000 ... View the full answer
Related Book For
Corporate Financial Accounting
ISBN: 978-1305653535
14th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
Posted Date:
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