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Question
On January 1, 2021, Canseco Plumbing Fixtures purchased equipment for $58,000. Residual value at the end of an estimated four-year service life is expected to be $10,000. The company expects the equipment to operate for 15,000 hours. The equipment operated for 3,600 and 4,400 hours in 2021 and 2022, respectively.
a. Calculate depreciation expense for 2021 and 2022 using straight line method.
b. Calculate depreciation expense for 2021 and 2022 using double-declining balance method.
c. Calculate depreciation expense for 2021 and 2022 using units-of-production using hours operated.
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