Question

CBOOK Calculator Depreciation by Three Methods; Partial Years Perdue Company purchased equipment on April 1 for $91,800. The equipment was expected to have a useful life of three years, or 8,100 operating hours, and a residual value of $2,700. The equipment was used for 1,500 hours during Year 1, 2,800 hours in Year 2, 2,400 hours in Year 3, and 1,400 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) units-of-output method, and (c) the double-declining balance method. Note: FOR DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then round the answer for each year to the nearest whole dollar a. Straight-line method Year Amount Year 1 Year 2 Year 3 Year 4 b. Units-of-output method Year Amount Year 1 Year 2 Check My Work < Previous 19 @ 80F9OHOM OPP: W POR ,

Answer 1

Straight Line
Date	Cost of asset	Depreciable cost	Depreciation rate	Depreciation expenses	Accumulated Depreciation	Book value
Year 1-9 months	$91,800	$89,100	25.0000%	$22,275	$22,275	$69,525
Year 2	$91,800	$89,100	33.3333%	$29,700	$51,975	$39,825
Year 3	$91,800	$89,100	33.3333%	$29,700	$81,675	$10,125
Year 4-3 months	$91,800	$89,100	8.3333%	$7,425	$89,100	$2,700
Units of production
Date	Depreciable cost	Depreciation per hours	No. of hours	Depreciation expenses	Accumulated Depreciation	Book value
Year 1	$89,100	$11.00	1500	$16,500	$16,500	$75,300
Year 2	$89,100	$11.00	2800	$30,800	$47,300	$44,500
Year 3	$89,100	$11.00	2400	$26,400	$73,700	$18,100
Year 4	$89,100	$11.00	1400	$15,400	$89,100	$2,700
Double Declining balance
Date	Cost of asset	Book Value	DDB Rate	Depreciation expenses	Accumulated Depreciation	Book value
Year 1-9 months	$91,800	$91,800	50.0000%	$45,900	$45,900	$45,900
Year 2	$91,800	$45,900	66.6667%	$30,600	$76,500	$15,300
Year 3	$91,800	$15,300	66.6667%	$10,200	$86,700	$5,100
Year 4-3 months	$91,800	$5,100	16.6667%	$850	$87,550	$4,250