3. PepsiCo Food Company purchased new equipment for $395,000. Residual value at the end of an estimated eight-year service life is expected to be $15,000. During the eight-year period, the company expects to use the equipment a total of 25,000 hours. Year Hours Used 1 2,250 2 2,410 3 2,800 4 1,900 Required: Calculate Depreciation expense for the first and second year for equipment using the following methods: 1. Straight-line. Year 1 Year 2 2. Double-declining-balance. Year 1 Year 2 3. Activity-based. Year 1 Year 2

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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3. PepsiCo Food Company purchased new equipment for $395,000. Residual value at the end of an
estimated eight-year service life is expected to be $15,000. During the eight-year period, the
company expects to use the equipment a total of 25,000 hours.
Year
Hours Used
1
2,250
2
2,410
3
2,800
4
1,900
Required:
Calculate Depreciation expense for the first and second year for equipment using the following
methods:
1. Straight-line. Year 1
Year 2
2. Double-declining-balance. Year 1
Year 2
3. Activity-based. Year 1
Year 2
Transcribed Image Text:3. PepsiCo Food Company purchased new equipment for $395,000. Residual value at the end of an estimated eight-year service life is expected to be $15,000. During the eight-year period, the company expects to use the equipment a total of 25,000 hours. Year Hours Used 1 2,250 2 2,410 3 2,800 4 1,900 Required: Calculate Depreciation expense for the first and second year for equipment using the following methods: 1. Straight-line. Year 1 Year 2 2. Double-declining-balance. Year 1 Year 2 3. Activity-based. Year 1 Year 2
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