Red Tiger Company purchased waterproofing equipment on January 3, 2005, for $180,000. The equipment was expected to have a useful life of three years, or 22,320 operating hours, and a residual value of $12,600. The equipment was used for 12,500 hours during 2005, 6,000 hours in 2006, and 3,820 hours in 2007.

Instructions
Determine the amount of depreciation expense for the years ended December 31, 2005, 2006, and 2007, by
(a) The straight-line method,
(b) The units-of-production method, and
(c) The declining balance method,
Using twice the straight-line rate. Also determine the total depreciation expense for the three years by each method. The following columnar headings are suggested for recording the depreciation expenseamounts:

Transcribed Image Text:

Depreciation Expense Straight-Line Units-of- Declining Year Method Production Method Balance Method