Xi Jiping purchased a boat at a cost of $12 000. The boat has an estimated residual value of $2 000 and an estimated life of five years, or 100 000 hours of operation. The boat was purchased on 1 July 2017, and was used 27 000 hours in 2017 /18 and 26 000 hours in 2018/19. What method of depreciation will maximise depreciation expense in 2017/18?

Straight-line

All methods produce the same depreciation expense for the year 2017 /2018

Unit of Activity

Reducing Balance