Question
Perdue Company purchased equipment on April 1 for $270,000. The equipment was expected to have a useful life of three years or 18,000 operating hours,
Perdue Company purchased equipment on April 1 for $270,000. The equipment was expected to have a useful life of three years or 18,000 operating hours, and a residual value of $9,000. The equipment was used for 7,500 hours during Year 1, 5,500 hours in Year 2, 4,000 hours in Year 3, and 1,000 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) units-of-activity method, and (c) the double-declining-balance method. Note: FOR DECLINING BALANCE ONLY, round the answer for each year to the nearest whole dollar.
a. Straight-line method Year Amount
Year 1 $
Year 2 $
Year 3 $
Year 4 $
b. Units-of-activity method Year Amount
Year 1 $
Year 2 $
Year 3 $
Year 4 $
c. Double-declining-balance Method Year Amount
Year 1 $
Year 2 $
Year 3 $
Year 4 $
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