Computing Depreciation Using Various Depreciation Methods

To demonstrate the computations involved in several methods of depreciating a fixed asset, the following data are

used for equipment purchased on January $1$ of the current year.

Required

Compute annual depreciation using each of the following methods.

a$.$ Straight$-$line depreciation: Compute the depreciation rate and amount for each year.

Note: Enter the rate in decimal form $($such as $0\mathrm{.}10)$ and not as a percentage.

b$.$ Units$-$of$-$production method using service hours as a measure of input: Compute the depreciation rate and amount

of depreciation expense for the first year assuming $3,960$ service hours of actual operation.

c$.$ Units$-$of$-$production method using units produced as a measure of output: Compute the depreciation rate and

amount of depreciation expense for the first year assuming $7,200$ units of output.

d$.$ Sum$-$of$-$the$-$years'$-$digits method: Compute the depreciation amount for each year.

e$.$ Double$-$declining$-$balance method: Compute the depreciation amount for each year.