Waldum Company purchased packaging equipment on January 5, 2012, for $135,000. T

Question

Waldum Company purchased packaging equipment on January 5, 2012, for $135,000. The equipment was expected to have a useful life of three years, or 18,000 operating hours, and a residual value of $13,500. The equipment was used for 8,600 hours during 2012, 5,300 hours in 2013, and 4,100 hours in 2014.

Determine the amount of depreciation expense for the years ended December 31, 2012, 2013, and 2014, for the double declining balance method. Also determine the total depreciation expense.

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

Explanation / Answer

Please find the table below.

2. The double declining method yields the highest depreciation expense for 2012 ($ 89,991)

3. All methods yield the same depreciation over the 3 year life.

Depreciation Expense Year Straight-Line Method Units-of-Output Method Double-Declining-Balance Method 2012 40,500 58,050 89,991 2013 40,500 35,775 30,003 2014 40,500 27,675 1,506 Total 121,500 121,500 121,500

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