On April $22,2023,$ Sandstone Enterprises purchased equipment for $$129,200.$ The company expects to use the equipment for $12,000$ working hours during its four$-$year life and that it will have a residual value of $$14,000.$ Sandstone has a December $31$ year end and pro$-$rates depreciation to the nearest month. The actual machine usage was: $1,900$ hours in $2023$; $2,800$ hours in $2024$; $3,700$ hours in $2025$; $2,700$ hours in $2026$; and $1,100$ hours in $2027.$

Instructions

Prepare a depreciation schedule for the life of the asset under each of the following methods:

straight$-$line,

double diminishing$-$balance assuming a rate of $50\%,$ and

units$-$of$-$production.

Which method results in the lowest profit over the life of the asset?

Which method results in the least cash used for depreciation over the life of the asset?

Calculate partial$-$year depreciation using different methods.