Ask Question
BusinessBusiness
11 March, 06:57

Comparing three depreciation methods 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 double-declining-balance method. Also determine the total depreciation expense for the three years by each method. Round the final answers for each year to the nearest whole dollar.

+5
Answers (1)
  1. 11 March, 07:50
    0
    a) $22,500

    b) 3.75 per unit

    c) 66.67%

    Explanation:

    As per the data given in the question,

    Calculation for amount of depreciation:

    Straight line Depreciation = ($72,000 - $4,500) : 3

    =$22,500

    Unit of production method = ($72,000 - $4,500) : 18,000

    = $3.75 per unit

    Double decline rate = 100:3

    = 33.33%*2

    = 66.67%

    Depreciation Expense

    Year Straight line Unit of production Double decline

    year 1 $22,500 7,600*$3.75 = $28,500 $72,000*66.67%=$48,000

    year 2 $22,500 6,000*$3.75 = $22,500 $24,000*66.67%=$16,000

    year 3 $22,500 4,400*$3.75 = $16,500 ($67,500-$64,000) = $3,500

    Total $67,500 $67,500 $67,500
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Comparing three depreciation methods Dexter Industries purchased packaging equipment on January 8 for $72,000. The equipment was expected ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
What happens if the fed sells $5 billion worth of treasury bonds on the open market?
Answers (1)
Marcy owns a trucking company that hauls goods all over the country. Wilson contracts with Marcy’s company to transport ten tractor-trailer loads of goods from Ohio to Texas.
Answers (1)
Which organization is likely to face the most complex task environment - a biotechnology company trying to develop a cure for cancer or a large retailer like the gap or macy's? why?
Answers (1)
15 Select the correct answer. When your ad appeals to the fears of a consumer, which advertising technique are you using? A. promotional advertising B. facts and statistics C. indirect advertising D. emotional appeal
Answers (1)
Financial statements can be prepared directly from the? reversing trial balance. post-closing trial balance. All of these are correct. trial balance. adjusted trial balance.
Answers (1)
New Questions in Business
Rodney Halpern works in the marketing department of a major manufacturing firm. Much of his job involves managing the movement of materials, parts, and information from suppliers to his firm.
Answers (1)
A car manufacturer offers either $2,000 cash back or zero percent financing for 5 years. A rational consumer will always take the cash back because money received today is worth more than money received in the future. true/false
Answers (1)
Because of its effect on the amount of capital per worker, in the short term an increase in the working population is likely to a. reduce productivity. Other things the same, this decrease will be larger in a rich country. b. reduce productivity.
Answers (1)
For 2020, Cullumber Company reported beginning total assets of $200,000 and ending total assets of $340,000. Its net income for this period was $40,000, and its net sales were $297,000. Compute the company's asset turnover for 2020.
Answers (1)
A politician employs illegal immigrants for housekeeping services. A nearby restaurant also employs illegal immigrants. The restaurant is fined, but the politician does not suffer any consequences. How would social location explain this?
Answers (1)
Home » Business » Comparing three depreciation methods 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.
Sign Up Forgot Password?