Reference no: EM132694383
Problem - Dexter Industries purchased packaging equipment on January 8 for $72,000. The equipment was expected to have a useful life of three years, or 18,000 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 4,400 hours in Year 3.
Required -
1. Determine the amount of depreciation expense for the three years ending December 31, by (a) the straight-line method. Also determine the total depreciation expense for the three years by each method.
(b) The units-of-activity method. Also determine the total depreciation expense for the three years by each method.
(c) The double-declining-balance method. Also determine the total depreciation expense for the three years by each method.
2. What method yields the most depreciation over the three-year life of the equipment?
3. What method yields the most depreciation over the three-year life of the equipment?
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