Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $172,600. The equipment was expected to have a useful life of four years or 4,800 operating hours, and a residual value of $14,200. The equipment was used for 1,680 hours during Year 1, 1,008 hours in Year 2, 1,344 hours in Year 3, and 768 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 Double-Declining- Year Straight-Line Method Method Balance Method Year 1 Year 2 Year 3 Year 4 Total %24 %24 %24 %24

Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $172,600. The equipment was expected to have a useful life of four years or 4,800 operating hours, and a residual value of $14,200. The equipment was used for 1,680 hours during Year 1, 1,008 hours in Year 2, 1,344 hours in Year 3, and 768 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 Double-Declining- Year Straight-Line Method Method Balance Method Year 1 Year 2 Year 3 Year 4 Total %24 %24 %24 %24

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Description: Comparing Three Depreciation MethodsDexter Industries purchased packaging equipment on January 8 for $172,600. The equipment was expected to have a useful life of four years,or 4,800 operating hours, and a residual value of $14,200. The equipment wa

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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Equipment was acquired at the beginning of the year at a cost of $77,580. The equipment was depreciated using the straight-line method based on an estimated useful life of six years and an estimated residual value of $7,620. a. What was the depreciation expense for the first year? b. Assuming the equipment was sold at the end of the second year for $58,600, determine the gain or loss on sale of the equipment. c. Journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. Debit credit
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Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $671,400. The equipment was expected to have a useful life of four years, or 8,000 operating hours, and a residual value of $55,400. The equipment was used for 2,800 hours during Year 1, 1,680 hours in Year 2, 2,240 hours in Year 3, and 1,280 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 Year Straight-Line Method Double-Declining- Balance Method Year 1 $ Year 2 $ $ $ Year 3 $ $ $ Year 4 $ $ $ Total $ $ $ 2. What method yields the highest depreciation expense for Year 1? 3. What method yields the most depreciation over the…
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Comparing Three Depreciation Methods Waylander Coatings Company purchased waterproofing equipment on January 6 for $501,400. The equipment was expected to have a useful life of four years, or 10,000 operating hours, and a residual value of $41,400. The equipment was used for 3,800 hours during Year 1, 3,100 hours in Year 2, 1,800 hours in Year 3, and 1,300 hours in Year 4. Required: 1. Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) the units-of-output method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the four years by each method.Note: FOR DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then round the answer for each year to the nearest whole dollar. 2. What method yields the highest depreciation expense for Year 1? 3. What method yields the most depreciation over the four-year life of the equipment?
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Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $282,600. The equipment was expected to have a useful life of four years, or 4,800 operating hours, and a residual value of $23,400. The equipment was used for 1,680 hours during Year 1, 1,008 hours in Year 2, 1,344 hours in Year 3, and 768 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 Year Straight-Line Method Units-of-Activity Method Double-Declining-Balance Method Year 1 $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 Year 2 $fill in the blank 4 $fill in the blank 5 $fill in the blank 6 Year 3 $fill in the…
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