# Comparing three depreciation methodsDexter Industries purchased packaging equipment on January 8 for \$108,000. The equipment was expected to have a useful life of three years, or 27,000 operating hours, and a residual value of \$5,400. The equipment was used for 10,800 hours during Year 1, 8,100 hours in Year 2, and 8,100 hours in Year 3.Required:1.  Determine the amount of depreciation expense for the three 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 three years by each method. Round the final answers for each year to the nearest whole dollar.

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Comparing three depreciation methods

Dexter Industries purchased packaging equipment on January 8 for \$108,000. The equipment was expected to have a useful life of three years, or 27,000 operating hours, and a residual value of \$5,400. The equipment was used for 10,800 hours during Year 1, 8,100 hours in Year 2, and 8,100 hours in Year 3.

Required:

1.  Determine the amount of depreciation expense for the three 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 three years by each method. Round the final answers for each year to the nearest whole dollar.

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Step 1

(a) Calculation of depreciation under straight-line method:

Results of the excel sheet is as follows:

Step 2

(b) Calculation of depreciation under the units-of-activity method:

Resu...

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