PR 9-3A Depreciation By Three Methods; Partial YearsObj. 2 Perdue Company purchased equipment on April 1 for $270,000. Theequipment was expected to have a useful life of three years or 18,000 operatingEXCEL TEMPLATEhours, and a residual value of $9,000. The equipment was used for 7,500 hoursduring Year 1, 5,500 hours in Year 2, 4,000 hours in Year 3, and 1,000 hours inYear 4.InstructionsDetermine the amount of depreciation expense for the years ended December 31, Year 1, Year 2,Year 3, and Year 4, by (a) the straight-line method, (b) the units-of-activity method, and (c) thedouble-declining-balance method.WOGOOétvMacBook Air CJKM16a.b.C.17Straight-Units-of-Double-Declining-18YearLineActivityBalance1965,25087,00087,00021,7502$Rage 12012421223.23424Totals261,0002526Calculations:27Straight-line method:For full year:282930(Cost$270,000Residual Value)YearsYearly Depreciation312$9,00032487,0003233For part years:34Year 1 Depreciation x Portion of YearDepreciation%3D3587,0000.75002465,2503637Year 4 Depreciation x Portion of YearDepreciation%3D3887,0003940Units-of-activity method:41(CostResidual Value)Total HoursRate424344RateHoursYearly Depreciation%3D45Year 17,50046Year 25,50047Year 34,00048Year 41,00049Page50Double-declining-balance method:51DepreciableBalanceYearly52Portion of YearDepreciation%3D53Year 154Year 255Year 356Since depreciation cannot cause book value to fall below residual value:57DepreciableBalance58Residual ValueYearly Depreciation%3D59Year 4

Name: PR 9-3A Depreciation By Three Methods; Partial YearsObj. 2 Perdue Com
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Description: PR 9-3A Depreciation By Three Methods; Partial YearsObj. 2 Perdue Company purchased equipment on April 1 for $270,000. Theequipment was expected to have a useful life of three years or 18,000 operatingEXCEL TEMPLATEhours, and a residual value of $9,

Under straight line method, depreciation is charged uniformly throughout the useful life of the…

Business

Accounting

Obj. 2 Perdue Company purchased equipment on April 1 for $270,000. The equipment was expected to have a useful life of three years or 18,000 operating EXCEL TEMPLATE 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. Instructions 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.

Obj. 2 Perdue Company purchased equipment on April 1 for $270,000. The equipment was expected to have a useful life of three years or 18,000 operating EXCEL TEMPLATE 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. Instructions 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.

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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