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 |
Chp Homework Show Me How Calculator Printem Comparing the depreciation methods Dexter Industries purchased packaging equipment...
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