Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $901,600. The equipment...

Transcribed Image Text:

Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $901,600. The equipment was expected to have a useful life of four years, or 8,800 operating hours, and a residual value of $74,400. The equipment was used for 3,080 hours during Year 1, 1,848 hours in Year 2, 2,464 hours in Year 3, and 1,408 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. Year Year 1 Year 2 Year 3 Year 4 Total Depreciation Expense Units-of-Activity Double-Declining- Straight-Line Method Method Balance Method $ $ $ $ $ $ $ 2. What method yields the highest depreciation expense for Year 1? 3. What method yields the most depreciation over the four-year life of the equipment? $ Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $901,600. The equipment was expected to have a useful life of four years, or 8,800 operating hours, and a residual value of $74,400. The equipment was used for 3,080 hours during Year 1, 1,848 hours in Year 2, 2,464 hours in Year 3, and 1,408 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. Year Year 1 Year 2 Year 3 Year 4 Total Depreciation Expense Units-of-Activity Double-Declining- Straight-Line Method Method Balance Method $ $ $ $ $ $ $ 2. What method yields the highest depreciation expense for Year 1? 3. What method yields the most depreciation over the four-year life of the equipment? $

Answer rating: 100% (QA)

1 Depreciation Expense Year StraightLine Method UnitsofActivity Method DoubleDeclining ... View the full answer