Computing Depreciation Using Various Depreciation Methods

The following data are available for equipment purchased on January $1$ of the current year.

Cost and residual valueEstimated service life:Acquisition cost

$$12,500$

Years$5$Residual value$$500$Service hours$10,000$Productive output $($units$)24,000$

Required

Compute annual depreciation using each of the following methods.

a$.$ Straight$-$line depreciation: Compute the depreciation rate and amount for each year.

Note:Enter the rate in decimal form $($such as $0\mathrm{.}10)$ and not as a percentage.

Depreciation RateAnswer $1$

Year $1$Year $2$Year $3$Year $4$Year $5$Depreciation ExpenseAnswer $2$Answer $3$Answer $4$Answer $5$Answer $6$

b$.$Units$-$of$-$production method using service hours as a measure of input: Compute the depreciation rate and amount of depreciation expense for the first year assuming $2,200$ service hours of actual operation.

Depreciation rate per service hourAnswer $7$

$$

Year $1$Depreciation ExpenseAnswer $8$

c$.$Units$-$of$-$production method using units produced as a measure of output: Compute the depreciation rate and amount of depreciation expense for the first year assuming $4,000$ units of output.

Depreciation rate per unitAnswer $9$

$$

Year $1$Depreciation ExpenseAnswer $10$

d$.$Sum$-$of$-$the$-$years$-$digits method: Compute the depreciation amount for each year.

Year $1$Year $2$Year $3$Year $4$Year $5$Answer $11$Answer $12$Answer $13$Answer $14$Answer $15$

e$.$Double$-$declining$-$balance method: Compute the depreciation amount for each year.

Year $1$Year $2$Year $3$Year $4$Year $5$Answer $16$Answer $17$Answer $18$Answer $19$Answer $20$