Depreciation by three methods; partial years Perdue Company purchased equipment on April 1 for $52,920. The equipment was expected to have a useful life of 3 years, or 5,400 operating hours, and a residual value of $1,620. The equipment was used for 1,000 hours during Year 1, 1,900 hours in Year 2, 1,600 hours in Year 3, and 900 hours in Year 4. Required: Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by the double-declining-balance method. Note: FOR DECLINING BALANCE , round the final multiplier to four decimal places. Then, round the answer for each year to the nearest whole dollar. 1. Double-declining-balance method- Fill in the amount Year Amount Year 1 $ Year 2 $ Year 3 $ Year 4
Depreciation by three methods; partial years Perdue Company purchased equipment on April 1 for $52,920. The equipment was expected to have a useful life of 3 years, or 5,400 operating hours, and a residual value of $1,620. The equipment was used for 1,000 hours during Year 1, 1,900 hours in Year 2, 1,600 hours in Year 3, and 900 hours in Year 4. Required: Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by the double-declining-balance method. Note: FOR DECLINING BALANCE , round the final multiplier to four decimal places. Then, round the answer for each year to the nearest whole dollar. 1. Double-declining-balance method- Fill in the amount Year Amount Year 1 $ Year 2 $ Year 3 $ Year 4
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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