On January 3, 2023, Xenex Innovations purchased computer equipment for $127,000. The equipment will be used in research and development activities for five years or a total of 10,000 hours and then sold for about $17,000. Assume actual usage in hours of: 2025 2026 2023 2024 1,400 1,790 2,500 4,350 Required: Calculate depreciation expense and book values for each year of the equipment's life for each method of depreciation using the table provided below. Xenex's year-end is December 31. (Do not round intermediate calculations.) Year 2023 2024 2025 2026 2027 2027 2,800 Straight-Line Depreciation Book Value at December 31 Expense Double-Declining-Balance Depreciation Book Value at Expense December 31 Units-of-Production Depreciation Book Value at Expense December 31

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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.