Depreciation by Three Methods; Partial Years Perdue Company purchased equipment on April 1 for $49,950. The equipment was expected to have a useful life of three years, or 6,480 operating hours, and a residual value of $1,350. The equipment was used for 1,200 hours during Year 1, 2,300 hours in Year 2, 1,900 hours in Year 3, and 1,080 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) units-of-output method, and (c) the double-declining-balance 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. a. Straight-line method Year Amount Year 1 12,150 Year 2 16,200 Year 3 16,200 Year 4 4,050 b. Units-of-output method Year Amount Year 1 9,000 Year 2 17,250 Year 3 14,250 Year 3 14,250 Year 4 8,100 c. Double-declining-balance method Year Amount Year 1 24,976 Year 2 16,650 Year 3 5,550 Year 4 462.4 X Feedback Check My Work Asset cost minus residual value equals depreciable cost. Sum the yearly depreciation to determine total depreciation. Annual units-of-output 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. Compare the total depreciation for all methods over the time period. Recall that straight-line depreciation allocates the depreciable cost of the asset equally over the period of use, while double-declining method is an accelerated method. Learning Objective 2