Question

Dexter Industries purchased packaging equipment on January 8 for $534400. The equipment was expected to have a useful life of three years, or 5,700 operating hours, and a residual value of $44,200. The equipment was used for 2,280 hours during Year 1, 1767 hours in Year 2, and 1,653 hours in Year 3.

Required:1.Determine the amount of depreciation expense for the three years ended December 31 by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the three years by each method. (Note: For STRAIGHT-LINE ONLY, round the first two years to the nearest whole dollar, then round the third year as necessary. For DECLINING BALANCE ONLY, round the multiplier to five decimal places. Then round the answer for each year to the nearest whole dollar.)2.What method yields the highest depreciation expense for Year 1?3.
What method yields the most depreciation over the three-year life of the equipment?
1. Determine the amount of depreciation expense for the three years ended December 31 by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the three years by each method. (Note: For STRAIGHT-LINE ONLY, round the first two years to the nearest whole dollar, then round the third year as necessary. For DECLINING BALANCE ONLY, round the multiplier to five decimal places. Then round the answer for each year to the nearest whole dollar.)
Depreciation Expense
1
Year
Straight-Line Method
Units-of-Activity Method
Double-Declining-Balance Method
2
Year 1
3
Year 2
4
Year 3
5
Total

2. What method yields the highest depreciation expense for Year 1?

Straight-line method

Units-of-output method

Double-declining-balance method

All three depreciation methods

3. What method yields the most depreciation over the three-year life of the equipment?

Straight-line method

Units-of-output method

Double-declining-balance method

All three depreciation methods

Answer 1

0 Answers Year E Straight Line Onits of Activity Double Method Methol Dec. Methoel 2 3 163400 163400 163400 Lorem 490200 1960 80 356284 151962 118750 142158 15166 Total 490200 49020

2) Double declining method yields the highest depreciation in Year 1.

3) All the methods, yields the equal depreciation over the 3 Years.

**WORKINGS BELOW

Cost of Equipment 534400 44200 Lens: Selvage Value Deprecable value of the Equipment ygo200 Life of the equipment (ears) Lite of the equipment (Hours) 57.00 > Straight line Methol Annud Depreciation: Depreciable value Life in Years Annual Depreciation: 4.90200/3. 1,6 3,400 7 Units of Activity Method Annual Reprecamhen Depreciable Value, Life in hows Annat Depreciation per tenit: 49020015700 = 86 Year Units Depreciation 2280 196080 151962 142158 1 2 3 RAS3 1767 1653 Depreciation rate Start > Double Declining Balance Method Rate of Depreciation = (1/ Life) x 2 (+ 13 2 366.67% end Year Book value Deprecithion % Depreciation Book Value 534400 66.67% 356284 178116 178116 66.67% 118750 59366 59366 15166_ 44200 1 2 3 59366 (44200 Residual Value Cuven

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