Comparing ThreeDepreciation Methods
Dexter Industriespurchased packaging equipment on January 8 for $274,600. Theequipment was expected to have a useful life of three years, or7,200 operating hours, and a residual value of $22,600. Theequipment was used for 2,880 hours during Year 1, 2,232 hours inYear 2, and 2,088 hours in Year 3.
Required:
1.Determine the amount of depreciation expense for the three yearsending December 31, Year 1, Year 2, Year 3, by (a) thestraight-line method, (b) the units-of-activity method, and (c) thedouble-declining-balance method. Also determine the totaldepreciation expense for the three years by each method.
Note: For all methods,round the answer for each year to the nearest whole dollar.
| Depreciation Expense |
| Year | Straight-Line Method | Units-of-Activity Method | Double-Declining-BalanceMethod |
| Year 1 | $ | | $ | | $ | |
| Year 2 | $ | | $ | | $ | |
| Year 3 | $ | | $ | | $ | |
| Total | $ | | $ | | $ | |
2.What method yields the highest depreciation expense for Year1?
3.What method yields the most depreciation over the three-year lifeof the equipment?
