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Obj. 2 Perdue Company purchased equipment on April 1 for $270,000. The equipment was expected to have a useful life of three years or 18,000 operating EXCEL TEMPLATE hours, and a residual value of $9,000. The equipment was used for 7,500 hours during Year 1, 5,500 hours in Year 2, 4,000 hours in Year 3, and 1,000 hours in Year 4. Instructions Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method.

Obj. 2 Perdue Company purchased equipment on April 1 for $270,000. The equipment was expected to have a useful life of three years or 18,000 operating EXCEL TEMPLATE hours, and a residual value of $9,000. The equipment was used for 7,500 hours during Year 1, 5,500 hours in Year 2, 4,000 hours in Year 3, and 1,000 hours in Year 4. Instructions Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method.

Corporate Financial Accounting
Corporate Financial Accounting
14th Edition
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter9: Long-term Assets: Fixed And Intangible
Section: Chapter Questions
Problem 9.17EX: Entries for sale of fixed asset Equipment acquired on January 8 at a cost of 168,000 has an...
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PR 9-3A Depreciation By Three Methods; Partial Years Obj. 2 Perdue Company purchased equipment on April 1 for $270,000. The equipment was expected to have a useful life of three years or 18,000 operating EXCEL TEMPLATE hours, and a residual value of $9,000. The equipment was used for 7,500 hours during Year 1, 5,500 hours in Year 2, 4,000 hours in Year 3, and 1,000 hours in Year 4. Instructions Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. WOGOO étv MacBook Air
Transcribed Image Text:PR 9-3A Depreciation By Three Methods; Partial Years Obj. 2 Perdue Company purchased equipment on April 1 for $270,000. The equipment was expected to have a useful life of three years or 18,000 operating EXCEL TEMPLATE hours, and a residual value of $9,000. The equipment was used for 7,500 hours during Year 1, 5,500 hours in Year 2, 4,000 hours in Year 3, and 1,000 hours in Year 4. Instructions Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. WOGOO étv MacBook Air
C J K M 16 a. b. C. 17 Straight- Units-of- Double-Declining- 18 Year Line Activity Balance 19 65,250 87,000 87,000 21,750 2$ Rage 1 20 1 24 21 22 3. 23 4 24 Totals 261,000 25 26 Calculations: 27 Straight-line method: For full year: 28 29 30 (Cost $270,000 Residual Value) Years Yearly Depreciation 31 2$ 9,000 3 24 87,000 32 33 For part years: 34 Year 1 Depreciation x Portion of Year Depreciation %3D 35 87,000 0.7500 24 65,250 36 37 Year 4 Depreciation x Portion of Year Depreciation %3D 38 87,000 39 40 Units-of-activity method: 41 (Cost Residual Value) Total Hours Rate 42 43 44 Rate Hours Yearly Depreciation %3D 45 Year 1 7,500 46 Year 2 5,500 47 Year 3 4,000 48 Year 4 1,000 49 Page 50 Double-declining-balance method: 51 Depreciable Balance Yearly 52 Portion of Year Depreciation %3D 53 Year 1 54 Year 2 55 Year 3 56 Since depreciation cannot cause book value to fall below residual value: 57 Depreciable Balance 58 Residual Value Yearly Depreciation %3D 59 Year 4
Transcribed Image Text:C J K M 16 a. b. C. 17 Straight- Units-of- Double-Declining- 18 Year Line Activity Balance 19 65,250 87,000 87,000 21,750 2$ Rage 1 20 1 24 21 22 3. 23 4 24 Totals 261,000 25 26 Calculations: 27 Straight-line method: For full year: 28 29 30 (Cost $270,000 Residual Value) Years Yearly Depreciation 31 2$ 9,000 3 24 87,000 32 33 For part years: 34 Year 1 Depreciation x Portion of Year Depreciation %3D 35 87,000 0.7500 24 65,250 36 37 Year 4 Depreciation x Portion of Year Depreciation %3D 38 87,000 39 40 Units-of-activity method: 41 (Cost Residual Value) Total Hours Rate 42 43 44 Rate Hours Yearly Depreciation %3D 45 Year 1 7,500 46 Year 2 5,500 47 Year 3 4,000 48 Year 4 1,000 49 Page 50 Double-declining-balance method: 51 Depreciable Balance Yearly 52 Portion of Year Depreciation %3D 53 Year 1 54 Year 2 55 Year 3 56 Since depreciation cannot cause book value to fall below residual value: 57 Depreciable Balance 58 Residual Value Yearly Depreciation %3D 59 Year 4
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