Comparing three depreciation methods Dexter Industries purchased packaging equipment on January 8 for $90,000. The...
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Comparing three depreciation methods Dexter Industries purchased packaging equipment on January 8 for $90,000. The equipment was expected to have a useful life of 3 years, or 18,000 operating hours, and a residual value of $3,600. The equipment was used for 7,200 hours during Year 1,5,400 hours in Year 2 , and 5,400 hours in Year 3 . Required: 1. Determine the amount of depreciation expense for the 3 years ending December 31 , by (a) the straight-line method, (b) the units-ofactivity method, and (c) the double-declining-balance method, Also determine the total depreciation expense for the 3 years by each method. Do not round intermediate calculations when determining the depreciation rate. Round the final answers for each year to the nearest whole dollar. 2. What method ylelds the highest depreciation expense for Year 1 ? 3. What method yields the most depreciation over the 3-year life of the equipment
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