Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $353,200. The equipment was expected to have a useful life of three years, or 5,400 operating hours, and a residual value of $29,200. The equipment was used for 2,160 hours during Year 1, 1,674 hours in Year 2, and 1,566 hours in Year 3. Required: 1. Determine the amount of depreciation expense for the three years ending December 31, Year 1, Year 2, Year 3, 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 three years by each method. Note: For all methods, round the answer for each year to the nearest whole dollar. Depreciation Expense Year Straight-Line Method Units-of-Activity Method Double-Declining-Balance Method Year 1 Year 2 Year 3 Total 2. What method yields the highest depreciation expense for Year 1? 3. What method yields the most depreciation over the three-year life of the equipment?

Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $353,200. The equipment was expected to have a useful life of three years, or 5,400 operating hours, and a residual value of $29,200. The equipment was used for 2,160 hours during Year 1, 1,674 hours in Year 2, and 1,566 hours in Year 3. Required: 1. Determine the amount of depreciation expense for the three years ending December 31, Year 1, Year 2, Year 3, 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 three years by each method. Note: For all methods, round the answer for each year to the nearest whole dollar. Depreciation Expense Year Straight-Line Method Units-of-Activity Method Double-Declining-Balance Method Year 1 Year 2 Year 3 Total 2. What method yields the highest depreciation expense for Year 1? 3. What method yields the most depreciation over the three-year life of the equipment?

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Description: **Comparing Three Depreciation Methods**Dexter Industries purchased packaging equipment on January 8 for $353,200. The equipment was expected to have a useful life of three years, or 5,400 operating hours, and a residual value of $29,200. The equipm

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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