Exercise 7-10 (Algo) Determine depreciation for the first year under three methods (LO7-4)

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On January 1, Pandemic Groceries purchased store equipment for $17,500. Pandemic estimates that at the end of its 10-year service life, the equipment will be worth $1,500. During the 10-year period, the company expects to use the equipment for a total of 10,000 hours. Pandemic used the equipment for 1,400 hours the first year.

Required:

Calculate depreciation expense of the equipment for the first year, using each of the following methods. (Do not round your intermediate calculations.)

Exercise 7-10 (Algo) Part 3

3. Activity-based.