Comparing Three Depreciation Methods Waylander Coatings Company purchased waterproofing equipment on January 6 for $822,200. The equipment was expected to have a useful life of four years, or 9,200 operating hours, and a residual value of $67,800. The equipment was used for 3,500 hours during Year 1, 2,900 hours in Year 2, 1,700 hours in Year 3, and 1,100 hours in Year 4. Required: 1. Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, 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. Note: 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? Double-declining-balance method 3. What method yields the most depreciation over the four-year life of the equipment? All three depreciation methods V Feedback Check My Work Asset cost minus residual value equals depreciable cost. Sum the yearly depreciation to determine total depreciation. Annual units-of-production depreciation allocates the cost of the asset equally over the units produced (hours). The double-declining rate is two times the straight-line rate. Book value is the asset cost minus accumulated depreciation. In the first year, the balance in the accumulated depreciation account is zero.Depreciation by Three Methods; Partial Years Perdue Company purchased equipment on October 1 for $46,750. The equipment was expected to have a useful life of three years, or 6,400 operating hours, and a residual value of $1,950. The equipment was used for 1,200 hours during Year 1, 2,200 hours in Year 2, 1,900 hours in Year 3, and 1,100 hours in Year 4. Required: Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Note: Round all final values for each depreciation method and each year to the nearest whole dollar. a. Straight-line method Year Amount Year 1 Year 2 Year 3 Year 4 b. Units-of-activity method Year Amount Year 1 Year 2 Year 3 Year 4 c. Double-declining-balance method rear Amount Year 1 Year 2 Year 3 Year 4Amortization and Depletion Entries Data related to the acquisition of timber rights and intangible assets during the current year ended December 31 are as follows: a. On December 31, the company determined that $1,240,000 of goodwill was impaired. b. Governmental and legal costs of $5,712,000 were incurred on September 30 in obtaining a patent with an estimated economic life of 12 years. Amortization is to be for one-fourth of a year. c. Timber rights on a tract of land were purchased for $850,000 on February 4. The stand of timber is estimated at 5,000,000 board feet. During the current year, 1,400,000 board feet of timber were cut and sold. Required: 1. Determine the amount of the amortization, depletion, or impairment for the current year for each of the foregoing items. Do not round your intermediate calculation. Item ment, Amortization or Depletion Expense b. C. Feedback Check My Work Intangible assets with indefinite lives are tested annually for impairment. Intangible assets with definite lives are amortized using the straight-line method. The depletion rate stays constant. 2. Journalize the adjusting entries required to record the amortization, depletion, or impairment for each item. a. Loss on Impairment of Goodwill Goodwill V b. Amortization Expense-Patents Patents C. Depletion Expense 10 Accumulated Depletion