Comparing three depreciation methods Dexter Industries purchased packaging equipment on January 8 for $81,900. The equipment was expected to have a useful life of 3 years, or 20,000 operating hours, and residual value of $4,500. The equipment was used for 7,600 hours during Year 1, 6,000 hours in Year 2, and 6,400 hours in Year 3. Required: 1. Determine the amount of depreciation expense for the 3 years ending December 31, by (a) the straight-line method, (b) the units-of-activity method, and (c) the dout declining-balance method. Also determine the total depreciation expense for the 3 years by each method. Do not round intermediate calculations when determining the depreciation rate. Round the final answers for each year to the nearest whole dollar. Year Year 1 Year 2 Straight-Line Method Depreciation Expense Units-of-Activity Method Year 3 Total 2. What method yields the highest depreciation expense for Year 1? Double-declining-balance method ✓ Double-Declining- Balance Method 3. What method yields the most depreciation over the 3-year life of the equipment? All three depreciation methods

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Comparing three depreciation methods
Dexter Industries purchased packaging equipment on January 8 for $81,900. The equipment was expected to have a useful life of 3 years, or 20,000 operating hours, and a
residual value of $4,500. The equipment was used for 7,600 hours during Year 1, 6,000 hours in Year 2, and 6,400 hours in Year 3.
Required:
1. Determine the amount of depreciation expense for the 3 years ending 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 3 years by each method. Do not round intermediate calculations when determining
the depreciation rate. Round the final answers for each year to the nearest whole dollar.
Depreciation Expense
Units-of-Activity
Method
Year
Year 1
Year 2
Year 3
Total
Straight-Line
Method
$
2. What method yields the highest depreciation expense for Year 1?
Double-declining-balance method
Double-Declining-
Balance Method
3. What method yields the most depreciation over the 3-year life of the equipment?
All three depreciation methods
Transcribed Image Text:Comparing three depreciation methods Dexter Industries purchased packaging equipment on January 8 for $81,900. The equipment was expected to have a useful life of 3 years, or 20,000 operating hours, and a residual value of $4,500. The equipment was used for 7,600 hours during Year 1, 6,000 hours in Year 2, and 6,400 hours in Year 3. Required: 1. Determine the amount of depreciation expense for the 3 years ending 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 3 years by each method. Do not round intermediate calculations when determining the depreciation rate. Round the final answers for each year to the nearest whole dollar. Depreciation Expense Units-of-Activity Method Year Year 1 Year 2 Year 3 Total Straight-Line Method $ 2. What method yields the highest depreciation expense for Year 1? Double-declining-balance method Double-Declining- Balance Method 3. What method yields the most depreciation over the 3-year life of the equipment? All three depreciation methods
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