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How did I get the Straight Line method and the Double decline method wrong? I thought that it was the same thing for at least
How did I get the Straight Line method and the Double decline method wrong? I thought that it was the same thing for at least 4 years for the Straight Line method and I would multiply the amount of money used to spend on equipment by 50% for the first 3 and then subtract the amount on year 3 with the residual value.
Depreciation by Three Methods; Partial Years Perdue Company purchased equipment on October 1 for $35,800. The equipment was expected to have a useful life of three years, or 4,900 operating hours, and a residual value of $1,500. The equipment was used for 900 hours during Year 1, 1,700 hours in Year 2, 1,500 hours in Year 3, and 800 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 8,575 x Year 2 8,575 x Year 3 $ 8,575 X Year 4 8,575 b. Units-of-activity method Year Amount Year 1 $ 6,300 Year 2 11,900 Year 3 10,500 Voar 4 t 5.600 Year 2 11,900 Year 3 10,500 Year 4 5,600 c. Double-declining-balance method Year Amount Year 1 17,900 Year 2 8,950 X Year 3 $ 4,475 X Year 4 $ 2,975 x Feedback Check My Work Asset cost minus residual value equals depreciable cost. Straight-line method allocates the depreciable cost of the asset equally over the period of use. Sum the yearly depreciation to determine total depreciation. Annual units-of-activity 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 method allocates the depreciable cost of the asset equally over the period of use, while double-declining-balance method is an accelerated methodStep by Step Solution
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