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PR 10-3A Depreciation by three methods; partial years 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 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. OBJ. 2 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.

PR 10-3A Depreciation by three methods; partial years 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 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. OBJ. 2 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
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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PR 10-3A Depreciation by three methods; partial years 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 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. OBJ. 2 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.
Transcribed Image Text:PR 10-3A Depreciation by three methods; partial years 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 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. OBJ. 2 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.
Depreciation Expense b. Units-of a. C. Double-Declining- Balance Straight- Year Line Activity Year 1 Year 2 Year 3 Year 4 Totals Calculations: Straight-line method: For full year: [Cost Residual Vi Years Yearly Depreci ation For part years: Year 1 Depreciation x Portion of Year Depreciation Year 4 Depreciation x Portion of Year Depreciation Units-of-activity method: (Cost Residual Vi Total Hours Rate Rate Hours Yearly Depreciation Year 1 Year 2 Year 3 Year 4 Double-declinino-balance method: Depreciabl e Balance Depreciatio Rate Portion of Year Year 1 Year 2 Year 3 Since deprediation cannot cause book value to fall below residual value Depreciabl e Balance Flesidual Value Yearly Deprecialion Year 4
Transcribed Image Text:Depreciation Expense b. Units-of a. C. Double-Declining- Balance Straight- Year Line Activity Year 1 Year 2 Year 3 Year 4 Totals Calculations: Straight-line method: For full year: [Cost Residual Vi Years Yearly Depreci ation For part years: Year 1 Depreciation x Portion of Year Depreciation Year 4 Depreciation x Portion of Year Depreciation Units-of-activity method: (Cost Residual Vi Total Hours Rate Rate Hours Yearly Depreciation Year 1 Year 2 Year 3 Year 4 Double-declinino-balance method: Depreciabl e Balance Depreciatio Rate Portion of Year Year 1 Year 2 Year 3 Since deprediation cannot cause book value to fall below residual value Depreciabl e Balance Flesidual Value Yearly Deprecialion Year 4
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