Comparing three depreciation methods Dexter Industries purchased packaging equipment on January 8 for $81,900. The equipment was expected to have a useful life of 3 years, or 20,000 operating hours, and a residual value of $4,500. The equipment was used for 7,600 hours durin Year 1, 6,000 hours in Year 2, and 6,400 hours in Year 3. Required: 1. Determine the amount of depreciation expense for the 3 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 expens the 3 years by each method. Do not round intermediate calculations when determining the depreciation rate. Round the final answers for each year to the nearest whole dollar. Year Year 1 Year 2 Year 3 Straight-Line Method Total Depreciation Expense Units-of-Activity Method $ 2. What method yields the highest depreciation expense for Year 1? Double-Declining- Balance Method 3. What method yields the most depreciation over the 3-year life of the equipment?

Comparing three depreciation methods Dexter Industries purchased packaging equipment on January 8 for $81,900. The equipment was expected to have a useful life of 3 years, or 20,000 operating hours, and a residual value of $4,500. The equipment was used for 7,600 hours durin Year 1, 6,000 hours in Year 2, and 6,400 hours in Year 3. Required: 1. Determine the amount of depreciation expense for the 3 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 expens the 3 years by each method. Do not round intermediate calculations when determining the depreciation rate. Round the final answers for each year to the nearest whole dollar. Year Year 1 Year 2 Year 3 Straight-Line Method Total Depreciation Expense Units-of-Activity Method $ 2. What method yields the highest depreciation expense for Year 1? Double-Declining- Balance Method 3. What method yields the most depreciation over the 3-year life of the equipment?

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Description: Comparing three depreciation methodsDexter Industries purchased packaging equipment on January 8 for $81,900. The equipment was expected to have a useful life of 3 years, or 20,000 operating hours, and a residual value of $4,500. The equipment was u

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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