Question

In: Accounting

Dexter Industries purchased packaging equipment on January 8 for $87,200. The equipment was expected to have...

Dexter Industries purchased packaging equipment on January 8 for $87,200. The equipment was expected to have a useful life of three years, or 20,000 operating hours, and a residual value of $7,200. The equipment was used for 8,590 hours during Year 1, 7,370 hours in Year 2, and 4,040 hours in Year 3.

Required:
1. Determine the amount of depreciation expense for the three years ended 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 three years by each method. (Note: For STRAIGHT-LINE ONLY, round the first two years to the nearest whole dollar, then round the third year as necessary. For DECLINING BALANCE ONLY, round the multiplier to five decimal places. Then round the answer for each year to the nearest whole dollar.)
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?

Solutions

Expert Solution

Answer to Question 1:

Answer to Question 1:

Answer to Question 1:

Answer to Question 2 and 3:


Related Solutions

Dexter Industries purchased packaging equipment on January 8 for $105,200. The equipment was expected to have...
Dexter Industries purchased packaging equipment on January 8 for $105,200. The equipment was expected to have a useful life of three years, or 20,000 operating hours, and a residual value of $7,200. The equipment was used for 8,520 hours during Year 1, 6,940 hours in Year 2, and 4,540 hours in Year 3. Required: 1. Determine the amount of depreciation expense for the three years ended December 31 by (a) the straight-line method, (b) the units-of-activity method, and (c) the...
Dexter Industries purchased packaging equipment on January 8 for $111,200. The equipment was expected to have...
Dexter Industries purchased packaging equipment on January 8 for $111,200. The equipment was expected to have a useful life of three years, or 20,000 operating hours, and a residual value of $7,200. The equipment was used for 8,680 hours during Year 1, 7,360 hours in Year 2, and 3,960 hours in Year 3. Required: 1. Determine the amount of depreciation expense for the three years ended December 31 by (a) the straight-line method, (b) the units-of-activity method, and (c) the...
Dexter Industries purchased packaging equipment on January 8 for $86,900. The equipment was expected to have...
Dexter Industries purchased packaging equipment on January 8 for $86,900. The equipment was expected to have a useful life of three years, or 20,000 operating hours, and a residual value of $6,900. The equipment was used for 8,640 hours during Year 1, 6,710 hours in Year 2, and 4,650 hours in Year 3. Required: 1. Determine the amount of depreciation expense for the three years ended December 31 by (a) the straight-line method, (b) the units-of-activity method, and (c) the...
Dexter Industries purchased packaging equipment on January 8 for $98,000. The equipment was expected to have...
Dexter Industries purchased packaging equipment on January 8 for $98,000. The equipment was expected to have a useful life of three years, or 20,000 operating hours, and a residual value of $6,000. The equipment was used for 8,980 hours during Year 1, 6,930 hours in Year 2, and 4,090 hours in Year 3. Required: 1. Determine the amount of depreciation expense for the three years ended December 31 by (a) the straight-line method, (b) the units-of-activity method, and (c) the...
Dexter Industries purchased packaging equipment on January 8 for $87,200. The equipment was expected to have...
Dexter Industries purchased packaging equipment on January 8 for $87,200. The equipment was expected to have a useful life of three years, or 20,000 operating hours, and a residual value of $7,200. The equipment was used for 8,590 hours during Year 1, 7,370 hours in Year 2, and 4,040 hours in Year 3. Required: 1. Determine the amount of depreciation expense for the three years ended December 31 by (a) the straight-line method, (b) the units-of-activity method, and (c) the...
Dexter Industries purchased packaging equipment on January 8 for $105,200. The equipment was expected to have...
Dexter Industries purchased packaging equipment on January 8 for $105,200. The equipment was expected to have a useful life of three years, or 20,000 operating hours, and a residual value of $7,200. The equipment was used for 8,520 hours during Year 1, 6,940 hours in Year 2, and 4,540 hours in Year 3. Required: 1. Determine the amount of depreciation expense for the three years ended December 31 by (a) the straight-line method, (b) the units-of-activity method, and (c) the...
Dexter Industries purchased packaging equipment on January 8 for $111,200. The equipment was expected to have...
Dexter Industries purchased packaging equipment on January 8 for $111,200. The equipment was expected to have a useful life of three years, or 20,000 operating hours, and a residual value of $7,200. The equipment was used for 8,680 hours during Year 1, 7,360 hours in Year 2, and 3,960 hours in Year 3. Required: 1. Determine the amount of depreciation expense for the three years ended December 31 by (a) the straight-line method, (b) the units-of-activity method, and (c) the...
Dexter Industries purchased packaging equipment on January 8 for $236,000. The equipment was expected to have...
Dexter Industries purchased packaging equipment on January 8 for $236,000. The equipment was expected to have a useful life of three years, or 5,700 operating hours, and a residual value of $19,400. The equipment was used for 2,280 hours during Year 1, 1,767 hours in Year 2, and 1,653 hours in Year 3. Required: 1. Determine the amount of depreciation expense for the three years ending December 31, Year 1, Year 2, Year 3, by (a) the straight-line method, (b)...
Dexter Industries purchased packaging equipment on January 8 for $72,000. The equipment was expected to have...
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, (b) the units-of-activity method, and (c) the...
Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $490,800. The equipment...
Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $490,800. The equipment was expected to have a useful life of three years, or 5,700 operating hours, and a residual value of $40,500. The equipment was used for 2,280 hours during Year 1, 1,767 hours in Year 2, and 1,653 hours in Year 3. Required: 1. Determine the amount of depreciation expense for the three years ending December 31, Year 1, Year 2, Year 3, by (a)...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT