Question

On January 1, 2021, Canseco Plumbing Fixtures purchased equipment for $52,000. Residual value at the end of an estimated four-year service life is expected to be $4,000. The company expects the equipment to operate for 12,000 hours. The equipment operated for 3,300 and 4,100 hours in 2021 and 2022, respectively.

Required:

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.

• Required A
• Required B
• Required C

Calculate depreciation expense for 2021 and 2022 using straight line method.

	Straight-Line Depreciation Choose Numerator: / Choose Denominator: = Annual Depreciation Expense Cost minus Salvage / Estimated Useful Life (years) = Depreciation Expense / 4 = Depreciation Expense 2021 2022

Calculate depreciation expense for 2021 and 2022 using double-declining balance method.

	Depreciation for the Period End of Period Annual Period Beginning of Period Book Value Depreciation Rate (%) Depreciation Expense Accumulated Depreciation Book Value 2021 % $0 $0 2022 % $0 $0

Calculate depreciation expense for 2021 and 2022 using units-of-production using hours operated. (Round "Depreciation per machine hour" answers to 2 decimal places.)

	Select formula for Units of Production Depreciation: Calculate 2021 depreciation expense: Depreciation per machine hour Machine hours in 2021 Depreciation in 2021 Calculate 2022 depreciation expense: Depreciation per machine hour Machine hours in 2022 Depreciation in 2022

Answer 1

Straight Line
Date	Cost of asset	Depreciable cost	Useful life	Depreciation expenses	Accumulated Depreciation	Book value
2021	$52,000	$48,000	4 Years	$12,000	$12,000	$40,000
2022	$52,000	$48,000	4 Years	$12,000	$24,000	$28,000
Units of production
Date	Cost of asset	Depreciation per hours	No. of hours	Depreciation expenses	Accumulated Depreciation	Book value
2021	$52,000	$4.00	3,300	$13,200	$13,200	$38,800
2022	$52,000	$4.00	4,100	$16,400	$29,600	$22,400
Double Declining balance
Date	Cost of asset	Book Value	DDB Rate	Depreciation expenses	Accumulated Depreciation	Book value
2021	$52,000	$52,000	50.00%	$26,000	$26,000	$26,000
2022	$52,000	$26,000	50.00%	$13,000	$39,000	$13,000