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iPad 8:23 PM @ * 41% + v2.cengagenow.com Chapter 1 Jackson C Chapter 1 3 Cengag legislation Wal-Mart User Login gin Chapter 10 Long-Term Assets: Fixed ar Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $986,200. The equipment was expected to have a useful life of three years, or 10,400 operating hours, and a residual value of $81,400. The equipment was used for 4,000 hours during Year 1, 3,200 hours in Year 2, and 1,900 hours in Year 3. Required: 1. Determine the amount of depreciation expense for the three years ending December 31, Year 1, Year 2, Year 3, 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 DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then round the answer for ach year to the nearest whole dollar. > Depreciation Expense Year Straight-Line Method Units-of-Activity Method Double-Declining-Balanc

Explanation / Answer

Determine depreciation expenses schedule :

Straight line dep = (986200-81400)/3=301600

Unit of production = (986200-81400)/10400=87 per unit

straight line rate= 100/3=33.33%

double decline rat e= 33.33*2=66.67%

Striaght line Unit of production Double decline balance Year 1 301600 348000 657467 Year 2 301600 278400 219155 Year 3 301600 278400 28178 Total 904800 904800 904800

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