i v2.cengagenow.com * CengageNoWv2 | Online teaching and learning resource from Cengage Learning Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $251,200. The equipment was expected to have a useful life of three years, or 4,800 operating hours, and a residual value of $20,800. The equipment was used for 1,920 hours during Year 1, 1,488 hours in Year 2, and 1,392 hours in Year 3. Required: 1. Determine the amount of depreciation expense for the three years ending December 31, Year 1, Year 2, Year 3, 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. Note: For all methods, round the answer for each year to the nearest whole dollar. Depreciation Expense Units-of-Activity Method Double-Declining-Balance Method Year Straight-Line Method Year 1 $4 Year 2 $4 Year 3 $4 Total 2. What method yields the highest depreciation expense for Year 1? 3. What method yields the most depreciation over the three-year life of the equipment? Previous Submit Test for Gradin Email Instructor All work saved.
i v2.cengagenow.com * CengageNoWv2 | Online teaching and learning resource from Cengage Learning Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $251,200. The equipment was expected to have a useful life of three years, or 4,800 operating hours, and a residual value of $20,800. The equipment was used for 1,920 hours during Year 1, 1,488 hours in Year 2, and 1,392 hours in Year 3. Required: 1. Determine the amount of depreciation expense for the three years ending December 31, Year 1, Year 2, Year 3, 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. Note: For all methods, round the answer for each year to the nearest whole dollar. Depreciation Expense Units-of-Activity Method Double-Declining-Balance Method Year Straight-Line Method Year 1 $4 Year 2 $4 Year 3 $4 Total 2. What method yields the highest depreciation expense for Year 1? 3. What method yields the most depreciation over the three-year life of the equipment? Previous Submit Test for Gradin Email Instructor All work saved.
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter8: Operating Assets: Property, Plant, And Equipment, And Intangibles
Section: Chapter Questions
Problem 8.4E
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