Montes Coffee Company purchased packaging equipment on January 5, 2014, for $98,000. The equipment was expected to have a useful life of three years, or 20,000 operating hours, and a residual value

The estimated value of a fixed asset at the end of its useful life.

of $6,000. The equipment was used for 8,980 hours during 2014, 6,930 hours in 2015, and 4,090 hours in 2016.

	Required:
1.	Determine the amount of depreciation expense for the years ended December 31, 2014, 2015, and 2016 by (a) the straight-line method A method of depreciation that provides for equal periodic depreciation expense over the estimated life a fixed asset. , (b) the units-of-output method A method of depreciation that provides for depreciation expense based on the expected productive capacity of a fixed asset. , and (c) the double-declining-balance method A method of depreciation that provides periodic depreciation expense based on the declining book value of a fixed asset over its estimated life. . Also determine the total depreciation expense for the three years by each method. (Note: For STRAIGHT-LINE ONLY, round each year to the nearest whole dollar and round the last year of depreciation as necessary. For DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then round the answer for each year to the nearest whole dollar.)
2.	What method yields the highest depreciation expense for 2014?
3.	What method yields the most depreciation over the three-year life of the equipment?

none

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Depreciation Expense

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1. Determine the amount of depreciation expense for the years ended December 31, 2014, 2015, and 2016 by (a) the straight-line method

A method of depreciation that provides for equal periodic depreciation expense over the estimated life a fixed asset.

, (b) the units-of-output method

A method of depreciation that provides for depreciation expense based on the expected productive capacity of a fixed asset.

, and (c) the double-declining-balance method

A method of depreciation that provides periodic depreciation expense based on the declining book value of a fixed asset over its estimated life.

. Also determine the total depreciation expense for the three years by each method. (Note: For STRAIGHT-LINE ONLY, round each year to the nearest whole dollar and round the last year of depreciation as necessary. For DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then round the answer for each year to the nearest whole dollar.)

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Score: 0/45

Depreciation Expense

1	Year	Straight-Line Method	Units-of-Output Method	Double-Declining-Balance Method
2	2014
3	2015
4	2016
5	Total

Solution

Depreciation Expense

1	Year	Straight-Line Method	Units-of-Output Method	Double-Declining-Balance Method
2	2014
3	2015
4	2016
5	Total

Points:

0 / 12