Dexter Industries purchased packaging equipment on January 8 for $805,800. The equipment was expected to have a useful life of four years, or 9,600 operating hours, and a residual value of $66,600. The equipment was used for 3,360 hours during Year 1, 2,016 hours in Year 2, 2,688 hours in Year 3, and 1,536 hours in Year 4. Required: 1.  Determine the amount of depreciation expense for the three 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 four years by each method. Round the answer for each year to the nearest whole dollar. Depreciation Expense Year Straight-Line Method   Units-of-Activity Method   Double-Declining- Balance Method Year 1 $fill in the blank 1   $fill in the blank 2   $fill in the blank 3   Year 2 $fill in the blank 4   $fill in the blank 5   $fill in the blank 6   Year 3 $fill in the blank 7   $fill in the blank 8   $fill in the blank 9   Year 4 $fill in the blank 10   $fill in the blank 11   $fill in the blank 12 Total $fill in the blank 13   $fill in the blank 14   $fill in the blank 15 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?

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Comparing Three Depreciation Methods

Dexter Industries purchased packaging equipment on January 8 for $805,800. The equipment was expected to have a useful life of four years, or 9,600 operating hours, and a residual value of $66,600. The equipment was used for 3,360 hours during Year 1, 2,016 hours in Year 2, 2,688 hours in Year 3, and 1,536 hours in Year 4.

Required:

1.  Determine the amount of depreciation expense for the three 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 four years by each method. Round the answer for each year to the nearest whole dollar.

Depreciation Expense
Year Straight-Line Method   Units-of-Activity Method   Double-Declining-
Balance Method
Year 1 $fill in the blank 1   $fill in the blank 2   $fill in the blank 3  
Year 2 $fill in the blank 4   $fill in the blank 5   $fill in the blank 6  
Year 3 $fill in the blank 7   $fill in the blank 8   $fill in the blank 9  
Year 4 $fill in the blank 10   $fill in the blank 11   $fill in the blank 12
Total $fill in the blank 13   $fill in the blank 14   $fill in the blank 15

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?
 

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