Dexter Industries purchased packaging equipment on January 8 for $219,800. The equipment was expected to have a useful life of four years, or 7,200 operating hours, and a residual value of $18,200. The equipment was used for 2,520 hours during Year 1, 1,512 hours in Year 2, 2,016 hours ir (ear 3, and 1,152 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 50,400 V $ 70,560 V 100,800 X Year 2 50,400 V $ 42,336 V 1,213,333 X Year 3 50,400 V $ 56,448 V $ Year 4 50,400 V $ 32,256 V $ Total 201,600 V $4 201,600 V $ 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? AIl throo

Dexter Industries purchased packaging equipment on January 8 for $219,800. The equipment was expected to have a useful life of four years, or 7,200 operating hours, and a residual value of $18,200. The equipment was used for 2,520 hours during Year 1, 1,512 hours in Year 2, 2,016 hours ir (ear 3, and 1,152 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 50,400 V $ 70,560 V 100,800 X Year 2 50,400 V $ 42,336 V 1,213,333 X Year 3 50,400 V $ 56,448 V $ Year 4 50,400 V $ 32,256 V $ Total 201,600 V $4 201,600 V $ 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? AIl throo

Name: Solve Double Declining Balance Method Comparing Three Depreciation Met
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Description: Solve Double Declining Balance Method Comparing Three Depreciation MethodsDexter Industries purchased packaging equipment on January 8 for $219,800. The equipment was expected to have a useful life of four years, or7,200 operating hours, and a residu

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 13PA: Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value...

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Concept explainers

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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Question

Solve Double Declining Balance Method

Comparing Three Depreciation Methods
Dexter Industries purchased packaging equipment on January 8 for $219,800. The equipment was expected to have a useful life of four years, or
7,200 operating hours, and a residual value of $18,200. The equipment was used for 2,520 hours during Year 1, 1,512 hours in Year 2, 2,016 hours in
Year 3, and 1,152 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
$
50,400
$
70,560
$4
100,800 x
Year 2
2$
50,400
2$
42,336
$4
1,213,333| Х
Year 3
2$
50,400
$
56,448
Year 4
$
50,400
$
32,256
$4
Total
201,600
$4
201,600
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?
All three depreciation methods

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When depreciation is recorded each period, what account is debited? a. Depreciation Expense b. Cash c. Accumulated Depreciation d. The fixed asset account involved Use the following information for Multiple-Choice Questions 7-4 through 7-6: Cox Inc. acquired a machine for on January 1, 2019. The machine has a salvage value of $20,000 and a 5-year useful life. Cox expects the machine to run for 15,000 machine hours. The machine was actually used for 4,200 hours in 2019 and 3,450 hours in 2020.
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