Question

Calculator Depreciation by Three Methods; Partial Years Perdue Company purchased equipment on April 1 for $35,100. The equipment was expected to have a useful life of three years, or 3,700 operating hours, and residual value of $1,080. The equipment was used for 700 hours during Year 1, 1,300 hours in Year 2, 1,100 hours in Year 3, and 680 hours in Year 4. Required: Determine the amount of depreciation expense for the years ended December 31, Year 1 Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) the units of activity method, and (c) the double-declining balance method. Note: FOR DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then round the answer for each year to the nearest whole dollar. a. Straight-line method Year Amount Year 1 Year 2 Year 3 Year 4 b. Units-of-activity method Year Amount Year 1 Year 2 Year 3 Year 4 Active Previous Next Send Submit Test for

Answer 1

The answer for above question is

a) Straight line Method

under straight linne a Calculation method. deprecatione tion liven Cost = $35, 100 Life of Asset = 3 years Salvage value = 1080 ($) Deprecation for year, a cost - Residual value life of asset 35700 ($) - 1080 ($) = 3 years Deprecation for year, - 11340 ($) ince we are following straight line method the Deprecation for year 2 = 11340 ($) Deprecation for year3 = 11,340 ($1.

b) Units of activity method

recation under Deprecation units or activity method. Cliven Cost = ($) 35,100 Residual value = $ 1050 Life of Asset Sin hours - 3780 hrs Deprecation for year, = 35,100 ($)- 1080 (6) 3780 hrs alherhour = 9($) Perhour XB 00 hours 700 hours x 9($)=6300(5 In year 1 = so Deprecation for yearg = 1300 hrs xa ($) - 11700($) Deprecation for year 3 = noo hours xa ($) = 9900 C$) for year t = 600 × 9 ($) - 5400 ($) Denrecation

C) Double decline balance method

Deprecatim under double baland a form is a forma an deprecation Double declining which method in which asset denrecation the rate done in Stalin at twice accelerated depreciated eine method Deprecation rate i x 100 useful 1x160 5 year - 33 % Deprecation for year, - - = Cost a asset x 2 x rate of dep -ecation 35,100 ($) * (2x337) 23166 ($) Deprecation for year = 11934 ($) x 66% = 7876.44 ($) Deprecation for years = 78746. 4058x66%. = 2678 (8) Deprecation for year 4 = 1380 ($) x 66% = 910 ($)