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Comparing Three Depreciation Methods

Dexter Industries purchased packaging equipment on January 8 for $537,200. The equipment was expected to have a useful life of four years, or 6,400 operating hours, and a residual value of $44,400. The equipment was used for 2,240 hours during Year 1, 1,344 hours in Year 2, 1,792 hours in Year 3, and 1,024 hours in Year 4.

Required:

1. Determine the amount of depreciation expense for the four years ending December 31 by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the four years by each method. Round the answer for each year to the nearest whole dollar.

Depreciation Expense
Year	Straight-Line Method		Units-of-Activity Method		Double-Declining- Balance Method
Year 1	$fill in the blank 1		$fill in the blank 2		$fill in the blank 3
Year 2	$fill in the blank 4		$fill in the blank 5		$fill in the blank 6
Year 3	$fill in the blank 7		$fill in the blank 8		$fill in the blank 9
Year 4	$fill in the blank 10		$fill in the blank 11		$fill in the blank 12
Total	$fill in the blank 13		$fill in the blank 14		$fill in the blank 15

2. What method yields the highest depreciation expense for Year 1?

Straight-line methodUnits-of-activity methodDouble-declining-balance methodAll three depreciation methods

3. What method yields the most depreciation over the four-year life of the equipment?

Straight-line methodUnits-of-activity methodDouble-declining-balance methodAll three depreciation methods