Depreciation by Three Methods Partial Years Razar Sharp Company purchased equipment on July 1, 2012, for $52,650 The equipment was expected to have a useful life of three years, or 3,780 operating hours, and a residual value of $1,620 The equipment was used for 700 hours during 2012, 1,300 hours in 2013, 1,100 hours in 2014, and 680 hours in 2015 Required Determine the amount of depreciation expense for the years ended December 31, 2012, 2013, 2014, and 2015, 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 2012 $ 2013 $ 2014 $ 2015 $ b Units of output method Year Amount 2012 $ 2013 $ 2014 $ 2015 $ c Double declining balance method Year Amount 2012 $ 2013 $ 2014 $ 2015 $ Hide Feedback Incorrect Check My Work Feedback 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 In the first year, the balance in the accumulated depreciation account is zero 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

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Depreciation by Three Methods; Partial Years Razar Sharp Company purchased equipment on July 1, 2012, for $52,650. The equipment was expected to have a useful

Depreciation by Three Methods; Partial Years

Razar Sharp Company purchased equipment on July 1, 2012, for $52,650. The equipment was expected to have a useful life of three years, or 3,780 operating hours, and a residual value of $1,620. The equipment was used for 700 hours during 2012, 1,300 hours in 2013, 1,100 hours in 2014, and 680 hours in 2015.

Required:

Determine the amount of depreciation expense for the years ended December 31, 2012, 2013, 2014, and 2015, 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
2012	$
2013	$
2014	$
2015	$

b. Units-of-output method

Year	Amount
2012	$
2013	$
2014	$
2015	$

c. Double-declining-balance method

Year	Amount
2012	$
2013	$
2014	$
2015	$

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Incorrect

Check My Work Feedback

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. In the first year, the balance in the accumulated depreciation account is zero.

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.