PR 9-3A Depreciation by three methods; partial years

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 Year 2, 4,00- Year 3, and 1,000 Year 4.

Instructions:

Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, Year 4, by (A) the straight-line method, (B) the units-of-activity, and (C) the double-declining method.

Depreciation Expense A. Straight Line C. Double-Declining Balance Units-of Activi Year 1 2 4 Totals Calculations Straight-line method For full year: -Yearly Depreciation (Cost - Residual Value) I Years For part years Year 1 Depreciation x Portion of Year Depreciation Year 4 Depreciation x Portion of Year Depreciation Units-of-activity method (Cost -Residual Value) Total Hours Rate -Yearly Depreciation Rate Hours Year 1 Year 2 Year 3 Year 4 Double-declining-balance method: Yearly Depreciable Balance Rate x Portion of Year- Depreciation Year 1 Year 2 Year 3 Since depreciation cannot cause book value to fall below residual value: Depreciable Balance Residual Value -Yearly Depreciation Year 4