Comparing Three Depreciation Methods Waylender Coatings Compeny purchased waterproofing equipment on January 6 for $1,031,600. The equipment was expected to have a useful life of four years, or 10,400 operating hours, and a residual value of $85,200. The equipment was used for 4,000 hours during Year 1, 3,200 hours in Year 2, 1,900 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-activity method, and (c) the double-declining- balance method. Also determine the total depreciation expense for the four years by each method. Note: Round the answer for each year to the nearest whole dollar Year Year 1 Straight-Line Method Depreciation Expense Units-of-Activity Method Year 3 Year 4 Total 2. What method yields the highest depreciation expense for Year 1? Double-Declining-Balance Method 3. What method yields the most depreciation over the four-year life of the equipment?

Comparing Three Depreciation Methods Waylender Coatings Compeny purchased waterproofing equipment on January 6 for $1,031,600. The equipment was expected to have a useful life of four years, or 10,400 operating hours, and a residual value of $85,200. The equipment was used for 4,000 hours during Year 1, 3,200 hours in Year 2, 1,900 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-activity method, and (c) the double-declining- balance method. Also determine the total depreciation expense for the four years by each method. Note: Round the answer for each year to the nearest whole dollar Year Year 1 Straight-Line Method Depreciation Expense Units-of-Activity Method Year 3 Year 4 Total 2. What method yields the highest depreciation expense for Year 1? Double-Declining-Balance Method 3. What method yields the most depreciation over the four-year life of the equipment?

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Description: Comparing Three Depreciation MethodsWaylander Coatings Company purchased waterproofing equipment on January 6 for $1,031,600. The equipment was expected to have a useful life of four years, or 10,400 operating hours, and a residual value of$85,200.

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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