Perdue Company purchased equipment on April 1 for $59,940. The equipment was expected to have a useful life of three years, or 4,860 operating hours, and a residual value of $1,620. The equipment was used for 900 hours during Year 1, 1,700 hours in Year 2, 1,500 hours in Year 3, and 760 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. Hello, sorry to bother you at this time. I am having trouble with my accounting homework. I am currently taking financial accounting. In doing the homework, I understand how to find the straight-line method and the units-of-activity method, however I am having issues trying to figure out the double-declining-balance method. I understand the step required when applying the double-declining-balance method, however not for this problem. When doing the straight line method, the answers come out to different values; meaning that they are changing at different percentages. How would I apply the double-declining-balance method?
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.
Perdue Company purchased equipment on April 1 for $59,940. The equipment was expected to have a useful life of three years, or 4,860 operating hours, and a residual value of $1,620. The equipment was used for 900 hours during Year 1, 1,700 hours in Year 2, 1,500 hours in Year 3, and 760 hours in Year 4.
Required:
Determine the amount of
Hello, sorry to bother you at this time. I am having trouble with my accounting homework. I am currently taking financial accounting. In doing the homework, I understand how to find the straight-line method and the units-of-activity method, however I am having issues trying to figure out the double-declining-balance method. I understand the step required when applying the double-declining-balance method, however not for this problem. When doing the
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