Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $256,800. The equipment...

Transcribed Image Text:

Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $256,800. The equipment was expected to have a useful life of four years, or 7,600 operating hours, and a residual value of $21,200. The equipment was used for 2,660 hours during Year 1, 1,596 hours in Year 2, 2,128 hours in Year 3, and 1,216 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. Depreciation Expense Year Year 1 Year 2 Year 3 Year 4. Straight-Line Method Units-of-Activity Method Total. 2. What method yields the highest depreciation expense for Year 1? Double-Declining- Balance Method 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 $256,800. The equipment was expected to have a useful life of four years, or 7,600 operating hours, and a residual value of $21,200. The equipment was used for 2,660 hours during Year 1, 1,596 hours in Year 2, 2,128 hours in Year 3, and 1,216 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. Depreciation Expense Year Year 1 Year 2 Year 3 Year 4. Straight-Line Method Units-of-Activity Method Total. 2. What method yields the highest depreciation expense for Year 1? Double-Declining- Balance Method 3. What method yields the most depreciation over the four-year life of the equipment?

Answer rating: 100% (QA)

Depreciation under all methods is the same 23560... View the full answer