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Comparing Three Depreciation Methods

Dexter Industries purchased packaging equipment on January 8 for $381,000. The equipment was expected to have a useful life of four years, or 7,600 operating hours, and a residual value of $31,400. 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 three 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.

Locatore linprogressa false art Wi-Fi mination 5 - Chapter 8, 9 and 10 Dexter Industries purchased packaging equipment on January 8 for $381,000. The equipment was ex 7,600 operating hours, and a residual value of $31,400. The equipment was used for 2,660 hours dur hours in Year 3, and 1,216 hours in Year 4. Required: 1. Determine the amount of depreciation expense for the three years ending December 31 by (a) the activity method, and (c) the double-declining-balance method. Also determine the total depreciation e Round the answer for each year to the nearest whole dollar. Depreciation Expense Double-Declining Balance Method Year Units-of-Activity Method Straight-Line Method Year 1 370,533.3 370,533.3 Year 2 Year 3 370,533.3 370,533.3 Year 4 1,482,133.3 Total 2. What method yields the highest depreciation expense for Year 1? ng equipment on January 8 for $381,000. The equipment was expected to have a useful life of four years, or I value of $31,400. The equipment was used for 2,660 hours during Year 1, 1,596 hours in Year 2, 2,128 (ear 4. ation expense for the three years ending December 31 by (a) the straight-line method, (b) the units-of- declining-balance method. Also determine the total depreciation expense for the four years by each method. to the nearest whole dollar. Depreciation Ex se ne Method Units-of-Activity Method Double-Declining- Balance Method 370,533.3 370,533.3 370,533.3 370,533.3 -482,133.3 - depreciation expense for Year 1? STF Cloudy A4