Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $187,000. The equipment was expected to have a useful life of four years, or 5,200 operating hours, and a residual value of $15,400. The equipment was used for 1,820 hours during Year 1, 1,092 hours in Year 2, 1,456 hours in Year 3, and 832 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 Year 1 Year 2 Year 3 Year 4 Total Straight-Line Method $ 42,900 ✔ 42,900 ✔ 42,900 42,900 ✔ 171,600 ✔ Units-of-Activity Method $ $ 60,060 V✔ 36,036 48,048 27,456 171,600 2. What method yields the highest depreciation expense for Year 1? Double-declining-balance method ✔ Double-Declining- Balance Method $ $ $ $ $ 3. What method yields the most depreciation over the four-year life of the equipment? All three depreciation methods 93,500 ✓

Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $187,000. The equipment was expected to have a useful life of four years, or 5,200 operating hours, and a residual value of $15,400. The equipment was used for 1,820 hours during Year 1, 1,092 hours in Year 2, 1,456 hours in Year 3, and 832 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 Year 1 Year 2 Year 3 Year 4 Total Straight-Line Method $ 42,900 ✔ 42,900 ✔ 42,900 42,900 ✔ 171,600 ✔ Units-of-Activity Method $ $ 60,060 V✔ 36,036 48,048 27,456 171,600 2. What method yields the highest depreciation expense for Year 1? Double-declining-balance method ✔ Double-Declining- Balance Method $ $ $ $ $ 3. What method yields the most depreciation over the four-year life of the equipment? All three depreciation methods 93,500 ✓

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Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 13PA: Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value...

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