Dexter Industries purchased packaging equipment on January 8 for $216,800. The equipment was expected to have a useful life of three years, or 5,100 operating hours, and a residual value of $17,900. The equipment was used for 2,040 hours during Year 1, 1,581 hours in Year 2, and 1,479 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 all methods, round the answer for each year to the nearest whole dollar. Depreciation Expense Straight-Line Units-of-Activity Double-Declining-Balance Year Method Method Method Year 1 Year 2 Year 3 Total 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?

Dexter Industries purchased packaging equipment on January 8 for $216,800. The equipment was expected to have a useful life of three years, or 5,100 operating hours, and a residual value of $17,900. The equipment was used for 2,040 hours during Year 1, 1,581 hours in Year 2, and 1,479 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 all methods, round the answer for each year to the nearest whole dollar. Depreciation Expense Straight-Line Units-of-Activity Double-Declining-Balance Year Method Method Method Year 1 Year 2 Year 3 Total 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?

Name: Dexter Industries purchased packaging equipment on January 8 for $216
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Description: Dexter Industries purchased packaging equipment on January 8 for $216,800. The equipment was expected to have auseful life of three years, or 5,100 operating hours, and a residual value of $17,900. The equipment was used for 2,040hours during Year 1

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter18: Accounting For Long-term Assets

Section: Chapter Questions

Problem 3CE: A machine costing 350,000 has a salvage value of 15,000 and an estimated life of three years....

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