Oriole Company purchased equipment for $238,400 on October 1, 2025. It is estimated that the equipment will have a useful life of 8 years and a salvage value of $15,200. Estimated production is 36,000 units and estimated working hours are 20.000. During 2025, Oriole uses the equipment for 500 hours and the equipment produces 1.100 units. Compute depreciation expense under each of the following methods. Oriole is on a calendar-year basis ending December 31. (Round rate per hour and rate per unit to 2 decimal places, eg. 5.35 and final answers to O decimal places, eg. 45,892.) (a) (b) (c) (d) Straight-line method for 2025 Activity method (units of output) for 2025 Activity method (working hours) for 2025 Sum-of-the-years-digits method for 2027 Double-declining-balance method for 2026 $ $ 6975 6820 5580

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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.