Dexter Industries purchased packaging equipment on January 8 for $480,400. The equipment was expected to have a useful life of four years, or 7,600 operating hours, and a residual value of $39,600. The equipment was used for 2.660 hours during Year 1, 1,596 hours in Year 2, 2,128 hours in Year 3, and 1,216 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. Year Year 1 Year 2 Year 3 Depreciation Expense Straight-Line Method Units-of-Activity Method 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?

Dexter Industries purchased packaging equipment on January 8 for $480,400. The equipment was expected to have a useful life of four years, or 7,600 operating hours, and a residual value of $39,600. The equipment was used for 2.660 hours during Year 1, 1,596 hours in Year 2, 2,128 hours in Year 3, and 1,216 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. Year Year 1 Year 2 Year 3 Depreciation Expense Straight-Line Method Units-of-Activity Method 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?

Name: Comparing Three Depreciation MethodsDexter Industries purchased packa
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: Comparing Three Depreciation MethodsDexter Industries purchased packaging equipment on January 8 for $480,400. The equipment was expected to have a useful life of four years, or 7,600 operating hours, and a residual value of $39,600. The equipment w

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $541,600. The equipment was expected to have a useful life of four years, or 9,200 operating hours, and a residual value of $44,800. The equipment was used for 3,220 hours during Year 1, 1,932 hours in Year 2, 2,576 hours in Year 3, and 1,472 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 Year 1 Year 2 Year 3 Year 4 Total Straight-Line Method $ $ $ $ Units-of-Activity Method $ 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…
Perdue Company purchased equipment on April 1 for $270,000. The equipment was expected to have a useful life of 3 years or 18,000 operating hours, and a residual value of $9,000. The equipment was used for 7,500 hours during Year 1, 5,500 hours in Year 2, 4,000 hours in Year 3, and 1,000 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 (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Note: FOR DECLINING BALANCE ONLY, do not round the multiplier. Then, round the answer for each year to the nearest whole dollar. a. Straight-line method Amount 87,000 X 87,000 87,000 87,000 X Year Year 1 Year 2 Year 3 Year 4 b. Units-of-activity method Year Year 1 Year 2 Year 3 Year 4 Year Year 1 Year 2 c. Double-declining-balance Method Year 3. Amount Year 4 108,750 79,750 58,000 14,500 Amount 180,000 X 60,000 X
Dexter Industries purchased packaging equipment on January 8 for $72,000. The equip-ment was expected to have a useful life of three years, or 18,000 operating hours, and a residual value of $4,500. The equipment was used for 7,600 hours during Year 1, 6,000 hours in Year 2, and 4,400 hours in Year 3.Instructions 1. Determine the amount of depreciation expense for the three 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 three years by each method. The following columnar headings are suggested for recording the depreciation expense amounts:Depreciation ExpenseStraight-LineYear MethodUnits-of-Activity MethodDouble-Declining-Balance Method2. What method yields the highest depreciation expense for Year 1? 3. What method yields the most depreciation over the three-year life of the equipment?
Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $667,000. The equipment was expected to have a useful life of four years, or 6,800 operating hours, and a residual value of $55,000. 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 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…
Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $302,200. The equipment was expected to have a useful life of four years, or 8,400 operating hours, and a residual value of $25,000. The equipment was used for 2,940 hours during Year 1, 1,764 hours in Year 2, 2,352 hours in Year 3, and 1,344 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 Year 1 Year 2 Year 3 Year 4 Total Straight-Line Method $ $ $ $ Units-of-Activity Method $ $ $ 2. What method yields the highest depreciation expense for Year 1? Double-Declining- Balance Method $ $ $ $ 3. What method yields the most depreciation over the…
On August 3, Franko Construction purchased special - purpose equipment at a cost of $8, 900, 000. The useful life of the equipment was estimated to be eight years, with an estimated residual value of $20,000. Required: Compute the depreciation expense to be recognized each calendar year for financial reporting purposes under the straight - line depreciation method (half- year convention). Compute the depreciation expense to be recognized each calendar year for financial reporting purposes under the 200 percent declining - balance method (half-year convention) with a switch to straight line when it will maximize depreciation expense. Which of these two depreciation methods (straight line or double - declining - balance) results in the highest net income for financial reporting purposes during the first two years of the equipment's use?
Oliver Company purchased tool sharpening equipment on October 1 for $138,000. The equipment was expected to have a useful life of three years or 13,000 operating hours, and a residual value of $7,700. The equipment was used for 1,650 hours during Year 1, 4,700 hours in Year 2, 3,850 hours in Year 3, and 2,800 hours in Year 4. Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by the straight-line method the units-of-activity method the double-declining-balance method.
Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $416,000. The equipment was expected to have a useful life of four years, or 7,200 operating hours, and a residual value of $34,400. 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 Year Year 1 Year 2 Year 3 Year 4 Total Straight-Line Method $ Units-of-Activity Method $ $ 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…
On August 3, Cinco Construction purchased special-purpose equipment at a cost of $9,900,000. The useful life of the equipment was estimated to be eight years, with an estimated residual value of $20,000. a. Compute the depreciation expense to be recognized each calendar year for financial reporting purposes under the straight-line depreciation method (half-year convention). b. Compute the depreciation expense to be recognized each calendar year for financial reporting purposes under the 200 percent declining-balance method (half-year convention) with a switch to straight-line when it will maximize depreciation expense. c. Which of these two depreciation methods (straight-line or double-declining-balance) results in the highest net income for financial reporting purposes during the first two years of the equipment’s use?
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…
s
Dexter Industries purchased packaging equipment on January 8 for $314,600. The equipment was expected to have a useful life of three years, or 7,800 operating hours, and a residual value of $26,000. The equipment was used for 3,120 hours during Year 1, 2,418 hours in Year 2, and 2,262 hours in Year 3. Required: 1. Determine the amount of depreciation expense for the three years ending December 31, Year 1, Year 2, Year 3, 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 three years by each method. Note: For all methods, 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 blank 7…