Waldum Company purchased packaging equipment on January 5, 2012, for $135,000. The equipment was expected to have a useful life of three years, or 18,000 operating hours, and a residual value of $13,500. The equipment was used for 8,600 hours during 2012, 5,300 hours in 2013, and 4,100 hours in 2014.

Instructions
1. Determine the amount of depreciation expense for the years ended December 31, 2012, 2013, and 2014, by
(a) The straight-line method,
(b) The units-of-output method,
(c) The double-declining-balance method.
Also determine the total depreciation expense for the three years by each method. The following columnar headings are suggested for recording the depreciation expense amounts:
2. What method yields the highest depreciation expense for 2012?
3. What method yields the most depreciation over the three-year life of theequipment?

Transcribed Image Text:

Depreciation Expense Straight Line Double-Declining Balance Method Units-of- -mi Output Method Yea Method