Reference no: EM133184405

Question - Comparing Three Depreciation Methods - Dexter Industries purchased packaging equipment on January 8 for $261,600. The equipment was expected to have a useful life of four years, or 8,000 operating hours, and a residual value of $21,600. The equipment was used for 2,800 hours during Year 1, 1,630 hours in Year 2, 2,240 hours in Year 3, and 1,280 hours in Year 4.

Required -

1. Determine the amount of depreciation expense for the four 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.

2. What method yields the highest depreciation expense for Year 1?

3. What method yields the most depreciation over the four-year life of the equipment?