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I got the right answers for the double-declining-balance method but i dont understand how. someone please explain Comparing three depreciation methods Dexter Industries purchased packaging
I got the right answers for the double-declining-balance method but i dont understand how. someone please explain
Comparing three depreciation methods Dexter Industries purchased packaging equipment on January 8 for $109,000. The equipment was expected to have a useful life of three years, or 27,000 operating hours, and a residual value of $5,400. The equipment was used for 10,800 hours during Year 1, 8,100 hours in Year 2, and 8,100 hours in Year 3. Required: 1. Determine the amount of depreciation expense for the three years ending December 31, 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 three years by each method. Round the final answers for each year to the nearest whole dollar. Depreciation Expense Straight-Line Method Units-of-Activity Method Double-Declining-Balance Method Year 1 34,200 41,040 72,000 Year Year 2 34,200 30,780 24,000 Year 3 34,200 30,780 6,600 Total $ 102,600 102,600 $ 102,600 2. What method yields the highest depreciation expense for Year 1? Double-declining-balance method 3. What method yields the most depreciation over the three-year life of the equipment? All three depreciation methods Feedback Step by Step Solution
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