On April 22, 2020, Pharoah Enterprises purchased equipment for $134,860. The company expects to use the equipment for 11,800 working hours during its 4-year life and that it will have a residual value of $14,500. Pharoah has a December 31 year end and pro-rates depreciation to the nearest month. The actual machine usage was: 2,000 hours in 2020; 2,500 hours in 2021; 3,900 hours in 2022; 2,500 hours in 2023; and 1,100 hours in 2024.

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Calculate depreciation expense for the life of the asset under straight-line method. (Round answers to 0 decimal places, e.g. 5,276.)

		Depreciation Expense
2020		$
2021		$
2022		$
2023		$
2024		$

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3.6/6

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Calculate depreciation expense for the life of the asset under double diminishing-balance method. (Round answers to 0 decimal places, e.g. 5,276.)

		Depreciation Expense
2020		$
2021		$
2022		$
2023		$

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0/6

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Calculate a depreciation expense for the life of the asset under units-of-production method. (Round unit rate to 2 decimal places, e.g. 2.25 and final answers to 0 decimal places, e.g. 5,276.)

		Depreciation Expense
2020		$
2021		$
2022		$
2023		$
2024		$

eTextbook and Media

Question Part Score

4.8/6

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