Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $259,400. The equipment was expected to have a useful life of four years, or 6,800 operating hours, and a residual value of $21,400. The equipment was used for 2,380 hours during Year 1, 1,428 hours in Year 2, 1,904 hours in Year 3, and 1,088 hours in Year 4. Required: 1. Determine the amount of depreciation expense for the four 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. Depreciation Expense Units-of-Activity Method $fill in the blank 2 Year Straight-Line Method Year 1 $fill in the blank 1 Year 2 $fill in the blank 4 $fill in the blank 5 Year 3 $fill in the blank 7 $fill in the blank 8 Year 4 $fill in the blank 10 $fill in the blank 11 Total $fill in the blank 13 $fill in the blank 14 Double-Declining- Balance Method $fill in the blank 3 $fill in the blank 6 $fill in the blank 9 $fill in the blank 12 $fill in the blank 15 2. What method yields the highest depreciation expense for Year 1? Straight-line methodUnits-of-activity method Double-declining-balance methodAll three depreciation methods 3. What method yields the most depreciation over the four-year life of the equipment?
Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $259,400. The equipment was expected to have a useful life of four years, or 6,800 operating hours, and a residual value of $21,400. The equipment was used for 2,380 hours during Year 1, 1,428 hours in Year 2, 1,904 hours in Year 3, and 1,088 hours in Year 4. Required: 1. Determine the amount of depreciation expense for the four 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. Depreciation Expense Units-of-Activity Method $fill in the blank 2 Year Straight-Line Method Year 1 $fill in the blank 1 Year 2 $fill in the blank 4 $fill in the blank 5 Year 3 $fill in the blank 7 $fill in the blank 8 Year 4 $fill in the blank 10 $fill in the blank 11 Total $fill in the blank 13 $fill in the blank 14 Double-Declining- Balance Method $fill in the blank 3 $fill in the blank 6 $fill in the blank 9 $fill in the blank 12 $fill in the blank 15 2. What method yields the highest depreciation expense for Year 1? Straight-line methodUnits-of-activity method Double-declining-balance methodAll three depreciation methods 3. What method yields the most depreciation over the four-year life of the equipment?
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter7: Operating Assets
Section: Chapter Questions
Problem 3MCQ: When depreciation is recorded each period, what account is debited? a. Depreciation Expense b. Cash...
Related questions
Question
please help
Transcribed Image Text:Comparing Three Depreciation Methods
Dexter Industries purchased packaging equipment on January 8 for $259,400. The equipment was
expected to have a useful life of four years, or 6,800 operating hours, and a residual value of $21,400.
The equipment was used for 2,380 hours during Year 1, 1,428 hours in Year 2, 1,904 hours in Year 3,
and 1,088 hours in Year 4.
Required:
1. Determine the amount of depreciation expense for the four 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.
Depreciation Expense
Units-of-Activity
Method
$fill in the blank 2
Year
Straight-Line Method
Year 1
$fill in the blank 1
Year 2
$fill in the blank 4
$fill in the blank 5
Year 3
$fill in the blank 7
$fill in the blank 8
Year 4
$fill in the blank 10
$fill in the blank 11
Total
$fill in the blank 13
$fill in the blank 14
Double-Declining-
Balance Method
$fill in the blank 3
$fill in the blank 6
$fill in the blank 9
$fill in the blank 12
$fill in the blank 15
2. What method yields the highest depreciation expense for Year 1?
Straight-line methodUnits-of-activity method Double-declining-balance methodAll three
depreciation methods
3. What method yields the most depreciation over the four-year life of the equipment?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
