Question

Chp Homework Show Me How Calculator Printem Comparing the depreciation methods Dexter Industries purchased packaging equipment on January 8 for $72,000. The equipment was expected to have a useful life of three years, or 18,000 operating hours, and a residual value of $3,600. The coment was for 7,200 hours during a 1.5.000 hours in War 2 and 5.400 hours in Year Required the double-declining-balance method. 1. Determine the amount of depreciation expense for the three years ending December 31, by (a) the stra n e method, (b) the units of activity method, and Also determine the total depreciation expense for the three years by each method. Round the final answers for each year to the nearest whole dollar Depreciation Expense Year Straight-Line Method Units of Activity Method Double Declining balance Method 2. What method is the chest depreciation expense for Year 19 3. What method is the moder n the three year of the woment

Answer 1

1
Year	Straight-line method	Units of activity method	Double Declining Balance method
Year 1	22800	27360	48000
Year 2	22800	20520	16000
Year 3	22800	20520	4400
Total	68400	68400	68400
2
Double Declining Balance method has highest depreciation for Year 1
3
All of the Depreciation methods have same depreciation over the three year life
Workings:
Straight-line method:
Annual Depreciation	22800	=(72000-3600)/3
Units of activity method:
Per hour depreciation	3.8	=(72000-3600)/18000
Year 1	27360	=7200*3.8
Year 2	20520	=5400*3.8
Year 3	20520	=5400*3.8
Double Declining Balance method:
Depreciation rate	66.6667%	=1/3*2
Year 1	48000	=72000*66.6667%
Year 2	16000	=(72000-48000)*66.6667%
Year 3	4400	=72000-48000-16000-3600