On January 3, 2023, Xenex Innovations purchased computer equipment for $125,250. The equipment will be used in research and development activities for five years or a total of 8,500 hours and then sold for about $19,000. Prepare a schedule with headings as shown below. Calculate depreciation and book values for each year of the equipment’s life for each method of depreciation. Xenex’s year-end is December 31.

Assume actual usage in hours of:

Analysis Component:

Which method will result in the greatest:

a. Total assets being reported on the balance sheet in 2023? in 2026?

b. Operating expenses being reported on the income statement in 2023? in 2026?

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Straight-Line Double-Declining-Balance Units-of-Production* Year Depreciation Expense Book Value at Dec. 31 Depreciation Expense Book Value at Dec. 31 Depreciation Expense Book Value at Dec. 31