Comparing Three Depreciation Methods

Waldum Company purchased packaging equipment on January 5, 2012, for $135,000. The equipment was expected to have a useful life of three years, or 18,000 operating hours, and a residual value of $13,500. The equipment was used for 8,600 hours during 2012, 5,300 hours in 2013, and 4,100 hours in 2014.

Required:

1. Determine the amount of depreciation expense for the years ended December 31, 2012, 2013, and 2014, by (a) the straight-line method, (b) units-of-output method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the three years by each method. Note: FOR DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then round the answer for each year to the nearest whole dollar.

Depreciation Expense
Year	Straight-Line Method	Units-of-Output Method	Double-Declining-Balance Method
2012	$	$	$
2013	$	$	$
2014	$	$	$
Total	$	$	$

2. What method yields the highest depreciation expense for 2012?

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