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PR 9-2A Comparing three depreciation methods Obj. 2 Dexter Industries purchased packaging equipment on January 8 for $81,900. The equipment was expected to have a
PR 9-2A Comparing three depreciation methods Obj. 2 Dexter Industries purchased packaging equipment on January 8 for $81,900. The equipment was expected to have a useful life of 3 years, or 20,000 operating hours, and a residual value of $4,500. The equipment was used for 7,600 hours during Year 1,6,000 hours in Year 2, and 6,400 hours in Year 3. Instructions 1. Determine the amount of depreciation expense for the 3 years ending December 31 , by (a) the straight-line method, (b) the units-of-activity method, and (c) the doublededining-balance method. Also determine the total depreciation expense for the 3 years by (Continued) each method. The following columnar headings are suggested for recording the depreciation expense amounts: 2. What method yields the highest depreciation expense for Year 1? 3. What method yields the most depreciation over the 3-year life of the equipment
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