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Chp Homework Show Me How Calculator Printem Comparing the depreciation methods Dexter Industries purchased packaging equipmen
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Answer #1
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
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