Waylander Coatings Company purchased waterproofing equipment on January 6 for $610,400. The equipment was expected to have a useful life of four years, or 8,000 operating hours, and a residual value of $50,400. The equipment was used for 3,000 hours during Year 1, 2,500 hours in Year 2, 1,400 hours in Year 3, and 1,100 hours in Year 4.

Required:

1. Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, 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.

Note: FOR DECLINING BALANCE ONLY, round the multiplier to four 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 four-year life of the equipment?

Waylander Coatings Company purchased waterproofing equipment on January 6 for $610,400. The equipment was expected to have a useful life of four years, or 8,000 operating hours, and a residual value of $50,400. The equipment was used for 3,000 hours during Year 1, 2,500 hours in Year 2, 1,400 hours in Year 3, and 1,100 hours in Year 4.

Required:

1. Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, 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.

Note: FOR DECLINING BALANCE ONLY, round the multiplier to four 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 four-year life of the equipment?

Comparing Three Depreciation Methods

Waylander Coatings Company purchased waterproofing equipment on January 6 for $487,400. The equipment was expected to have a useful life of four years, or 10,400 operating hours, and a residual value of $40,200. The equipment was used for 4,000 hours during Year 1, 3,200 hours in Year 2, 1,900 hours in Year 3, and 1,300 hours in Year 4.

Required:

1. Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) the units-of-output method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the four years by each method.

Note: FOR DECLINING BALANCE ONLY, round the multiplier to four 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 four-year life of the equipment?

Comparing Three Depreciation Methods

Waylander Coatings Company purchased waterproofing equipment on January 6 for $314,800. The equipment was expected to have a useful life of four years, or 7,600 operating hours, and a residual value of $26,000. The equipment was used for 2,900 hours during Year 1, 2,400 hours in Year 2, 1,400 hours in Year 3, and 900 hours in Year 4.

Required:

1. Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) the units-of-output method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the four years by each method.

Note: FOR DECLINING BALANCE ONLY, round the multiplier to four 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 four-year life of the equipment?

Comparing Three Depreciation Methods

Waylander Coatings Company purchased waterproofing equipment on January 6 for $272,000. The equipment was expected to have a useful life of four years, or 6,400 operating hours, and a residual value of $22,400. The equipment was used for 2,400 hours during Year 1, 2,000 hours in Year 2, 1,200 hours in Year 3, and 800 hours in Year 4.

Required:

1. Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, 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.

Note: FOR DECLINING BALANCE ONLY, round the multiplier to four 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 four-year life of the equipment?

Comparing Three Depreciation Methods

Waylander Coatings Company purchased waterproofing equipment on January 6 for $321,800. The equipment was expected to have a useful life of four years, or 7,200 operating hours, and a residual value of $26,600. The equipment was used for 2,700 hours during Year 1, 2,200 hours in Year 2, 1,300 hours in Year 3, and 1,000 hours in Year 4.

Required:

1. Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, 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.

Note: FOR DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then round the answer for each year to the nearest whole dollar.

Depreciation Expense

Year   Straight-Line Method Units-of-Activity Method    Double-Declining-Balance Method

Year 1 $_______________ $___________________ $______________________

Year 2 $_______________ $___________________ $______________________

Year 3 $_______________ $___________________ $______________________

Year 4 $_______________ $___________________ $______________________

Total $_______________ $___________________ $______________________

What method yields the highest depreciation expense for Year 1? ______________

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

Comparing Three Depreciation Methods

Waylander Coatings Company purchased waterproofing equipment on January 6 for $682,800. The equipment was expected to have a useful life of four years, or 7,200 operating hours, and a residual value of $56,400. The equipment was used for 2,700 hours during Year 1, 2,200 hours in Year 2, 1,300 hours in Year 3, and 1,000 hours in Year 4.

Required:

1. Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) the units-of-output method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the four years by each method.

Note: FOR DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then round the answer for each year to the nearest whole dollar.

Depreciation Expense

Year Straight-Line Method Units-of-Output Method Double-Declining-Balance Method

Year 1 $---------------------- $------------------------ $--------------------------

Year 2 $---------------------- $------------------------ $---------------------------

Year 3 $---------------------- $------------------------ $---------------------------

Year 4 $---------------------- $------------------------ $---------------------------

Total $---------------------- $------------------------ $---------------------------

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?

----------------------------

Cash to Monthly Cash Expenses Ratio

Amicus Therapeutics, Inc., is a biopharmaceutical company that develops drugs for the treatment of various diseases, including Parkinson’s disease. Amicus Therapeutics reported the following financial data (in thousands) for three recent years:

a. Determine the monthly cash expenses for Year 3, Year 2, and Year 1 (in thousands).

b. Determine the ratio of cash to monthly cash expenses for Year 3, Year 2, and Year 1 as of December 31. Round to one decimal place.

c. Based on (a) and (b), which of the following statements is correct.

Computing Straight-Line and Double-Declining-Balance Depreciation

On January 2, Haskins Company purchases a laser cutting machine for use in fabrication of a part for one of its key products. The machine cost $112,000, and its estimated useful life is five years, after which the expected salvage value is $7,000. Compute depreciation expense for each year of the machine's useful life under each of the following depreciation methods:

Note: Round answers to the nearest whole number, when applicable.

a. Straight-line

b. Double-declining-balance

King Fisher Aviation is evaluating an investment project with the following case flows:

year 1 $6,000:

year 2 $5,500:

year3 $7,000:

year 4 $8,000

Discount rate 14 percent What is the discounted payback period for these cash flows if the initial cost is 15,000? What if the initial cost is $12,000? What if the cost is $16,000?

I need all 4 years with the discount rate at 14% and with the different initial costs.