Computing Partial Period Depreciation under Multiple Depreciation Methods

To demonstrate the computations involved in several methods of depreciating a fixed asset, the following information is provided.

Cost and residual valueEstimated service lifeAcquisition cost$$45,000$Years$5$Residual value$$1,800$Service hours$36,000$Productive output $($units$)86,400$

Required

Compute the annual depreciation using each of the following methods assuming that the asset was purchased on August $1$ of the current year.

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

Carry all decimals in calculations; round final$$answers to the nearest dollar.

Depreciation rate:Answer $1$

Year $1$Year $2$Year $3$Year $4$Year $5$Year $6$Answer $2$Answer $3$Answer $4$Answer $5$Answer $6$Answer $7$

b$.$ Units$-$of$-$production method using service hours as a measure of input: Compute the depreciation rate and amount for the first partial year assuming $3,240$ service hours of actual operation.

Depreciation rate:Answer $8$

Year $1$Answer $9$

c$.$ Units$-$of$-$production method using units produced as a measure of output: Compute the depreciation rate and amount for the first partial year assuming $6,480$ units of output.

Depreciation rate:Answer $10$

Year $1$Answer $11$