Computing Depreciation Using Various Depreciation Methods To demonstrate the computations involved in several methods of depreciating a fixed asset, the following data are used for equipment purchased on January 1, 2020. Cost and residual value Estimated service life: Acquisition cost $37,500 Years 5 Residual value $1,500 Service hours 30,000 Productive output (units) 72,000 Required Compute annual depreciation using each of the following methods. a. Straight-line depreciation: Compute the depreciation rate and amount for each year. Depreciation Rate 0.2 2020 2021 2022 2023 2024 Depreciation Expense $ 7,200 $ 7,200 $ 7,200 $ 7,200 $ 7.200 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 6,600 service hours of actual operation. Depreciation Rate 5.917 x 2020 7.810 x Depreciation Expense 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 12,000 units of output. Depreciation Rate 31.250 x 2020 6,250 X Depreciation Expenses d. Sum-of-the-years-digits method: Compute the depreciation amount for each year. 2020 2021 2022 2023 $ 11,833 * $ 9,467 X $ 7,100 x 5 4,733 * $ 2.367 X 2024 e. Double-declining-balance method: Compute the depreciation amount for each year. 2020 2024 2021 8,440 x $ 14.450 x $ 2022 5.080 x 5 2023 3,048 x $ $ 1.829 x Check