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Wildhorse Co. purchased equipment on March 31, 2021, at a cost of $264,000. Management is considering the merits of using the diminishing balance or units-of-production

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Wildhorse Co. purchased equipment on March 31, 2021, at a cost of $264,000. Management is considering the merits of using the diminishing balance or units-of-production method of depreciation instead of the straight-line method, which it currently uses for other equipment. The new equipment has an estimated residual value of $8,000 and an estimated useful life of either four years or B0,000 units. Demand for the products produced by the equipment is sporadic so the equipment will be used more in some years than in others. Assume the equipment produces the following number of units each year: 14,600 units in 2021:20,600 units in 2022: 19,800 units in 2023; 20,000 units in 2024; and 5,000 units in 2025. Wildhorse has a December 31 year end. Depreciable Amount Depreciation Expense Accumulated Depreciation Carrying Amount Year 264,000 2021 $ 256,000 48,000 48,000 216,000 2022 256,000 64.000 112,000 152.000 2023 256,000 64.000 176,000 88,000 2024 256.000 64,000 240,000 24,000 2025 256,000 16,000 256,000 8.000 Double diminishing-balance method: Opening Carrying Amount Depreciation Expense Accumulated Depreciation Carrying Amount Year 264.000 2021 $ 264.000 $ 99,000 99.000 165.000 2022 165.000 2.500 181.500 12.500 2023 62.500 41.250 222.750 41.250 2024 41.250 20.625 2431375 20.625 2025 20,625 12.625 256.000 6,000 Depreciation Expense Accumulated Depreciation Carrying Amount Year Units-of-Production $ 264,000 2021 14,600 46,720 $ $ 46.720 217.280 2022 20,600 65,920 112,640 151.360 2023 19,800 63,360 176,000 88,000 2024 20.000 64,000 240.000 24,000 2025 5.000 16,000 256,000 8.000 (b) Compare the total depreciation expense and accumulated depreciation under each of the three methods over the life of the equipment. (Round answers to decimal places, eg,5,275) Double-Diminishing Balance Straight-Line Units-of-Production Total depreciation expense Accumulated depreciation

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