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Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $274,600. The equipment was expected to...

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Accounting

  1. 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
    YearStraight-Line MethodUnits-of-Activity MethodDouble-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?

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