Deprecdation by Three Methods; Partial Years Perdue Company pur chased equipment

Question

Deprecdation by Three Methods; Partial Years Perdue Company pur chased equipment on Apeil 1 for $36,720. The equipment was expected to have a useful life of three years, or 6,480 operating hours and a residual valuve of $1,080. The equipment was used for 1,200 hours during Year 1, 2,300 hours in Year 2, 1,900 hours in Year 3, and 1,080 hours in Year Required Determine the amout 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) units-of-output method, and (c) the double-dedining-balance method. Note: FOR DECLINING BALANCE ONLY, round the muiltiplier to four decimal places. Then round the answer for each year to the nearest whole dollar Straight line method Year 2 year 3 b. Units-of-sutpust method Year 2 ?? Insert PrtSc Delete 5 6 8 9 7

Explanation / Answer

straight line method : Depreciation per year = [cost -residual value ]/useful life

              = [36720-1080]/3

              = 11880

2)

depreciation rate per unit :[ 36720-1080]6480 = $ 5.5 per unit

3)double declining method :

double declining rate = 2 /useful life = 2/3 = .6667

Depreciation expense 1 11880*9/12 = 8910               [1april -31dec] 2 11880 3 11880 4 2980                                    [1jan -31 mar]

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