Depreciation by Three Methods; Partial Years

Perdue Company purchased equipment on April 1, 2014, for $270,000. The equipment was expected to have a useful life of three years, or 18,000 operating hours, and a residual value of $9,000. The equipment was used for 7,500 hours during 2014, 5,500 hours in 2015, 4,000 hours in 2016, and 1,000 hours in 2017.

Required:

Determine the amount of depreciation expense for the years ended December 31, 2014, 2015, 2016, and 2017, by (a) the straight-line method, (b) units-of-output method, and (c) the double-declining-balance method.

Note: FOR DECLINING BALANCE ONLY, round the answer for each year to the nearest whole dollar.

a. Straight-line method

Year       Amount

2014       $65,250

2015       $87,000

2016       $87,000

2017       $21,750

b. Units-of-output method

Year       Amount

2014       $108,750

2015       $79,750

2016       $58,000

2017       $14,500

c. Double-declining-balance Method

Year       Amount

2014       $135,000

2015       $90,000

2016       $30,000

2017       $-??????

Answer rating: 100% (QA)

Amount of depriciation under the three methods a Straightline Method Formula for Depriciation per ye... View the full answer