Monteâs Coffee Company purchased packaging equipment on January5, 2014, for $90,000. The equipment was expected to have a usefullife of three years, or 20,000 operating hours, and a residualvalue of $6,000. The equipment was used for 8,900 hours during2014, 7,100 hours in 2015, and 4,000 hours in 2016.
Required: 1. Determine the amount ofdepreciation expense for the years ended December 31, 2014, 2015,and 2016 by (a) the straight-line method, (b) the units-of-outputmethod, and (c) the double-declining-balance method. Also determinethe total depreciation expense for the three years by each method.(Note: For DECLINING BALANCE ONLY, round theanswer for each year to the nearest whole dollar.) 2. What method yields the highestdepreciation expense for 2014? 3. What method yields the mostdepreciation over the three-year life of the equipment?
X
Depreciation Expense
1. Determine the amount of depreciation expense for the yearsended December 31, 2014, 2015, and 2016 by (a) the straight-linemethod, (b) the units-of-output method, and (c) thedouble-declining-balance method. Also determine the totaldepreciation expense for the three years by each method.
Score: 0/45
Depreciation Expense
1
Year
Straight-Line Method
Units-of-Output Method
Double-Declining-Balance Method
2
2014
3
2015
4
2016
5
Total
Points:
0 / 12
Feedback
Check My Work
Asset cost minus residual value equals depreciable cost. Sum theyearly depreciation to determine total depreciation.
Annual units-of-production depreciation allocates the cost ofthe asset equally over the units produced (hours).
The double-declining rate is two times the straight-line rate.Book value is the asset cost minus accumulated depreciation. In thefirst year, the balance in the accumulated depreciation account iszero.
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Monteâs Coffee Company purchased packaging equipment on January5, 2014, for $90,000. The equipment was expected to have a usefullife of three years, or 20,000 operating hours, and a residualvalue of $6,000. The equipment was used for 8,900 hours during2014, 7,100 hours in 2015, and 4,000 hours in 2016.
| Required: | |
| 1. | Determine the amount ofdepreciation expense for the years ended December 31, 2014, 2015,and 2016 by (a) the straight-line method, (b) the units-of-outputmethod, and (c) the double-declining-balance method. Also determinethe total depreciation expense for the three years by each method.(Note: For DECLINING BALANCE ONLY, round theanswer for each year to the nearest whole dollar.) |
| 2. | What method yields the highestdepreciation expense for 2014? |
| 3. | What method yields the mostdepreciation over the three-year life of the equipment? |
X
Depreciation Expense
1. Determine the amount of depreciation expense for the yearsended December 31, 2014, 2015, and 2016 by (a) the straight-linemethod, (b) the units-of-output method, and (c) thedouble-declining-balance method. Also determine the totaldepreciation expense for the three years by each method.
Score: 0/45
Depreciation Expense |
1 | Year | Straight-Line Method | Units-of-Output Method | Double-Declining-Balance Method |
2 | 2014 | |||
3 | 2015 | |||
4 | 2016 | |||
5 | Total |
Points:
0 / 12
Feedback
Check My Work
Asset cost minus residual value equals depreciable cost. Sum theyearly depreciation to determine total depreciation.
Annual units-of-production depreciation allocates the cost ofthe asset equally over the units produced (hours).
The double-declining rate is two times the straight-line rate.Book value is the asset cost minus accumulated depreciation. In thefirst year, the balance in the accumulated depreciation account iszero.
Shaded cells have feedback.
Related questions
Depreciation by Three Methods; Partial Years
Razar Sharp Company purchased equipment on July 1, 2014, for$48,870. The equipment was expected to have a useful life of threeyears, or 4,320 operating hours, and a residual value of $1,350.The equipment was used for 800 hours during 2014, 1,500 hours in2015, 1,300 hours in 2016, and 720 hours in 2017.
Required:
Determine the amount of depreciation expense for the years endedDecember 31, 2014, 2015, 2016, and 2017, by (a) the straight-linemethod, (b) units-of-output method, and (c)thedouble-declining-balance method.
Note: FOR DECLINING BALANCE ONLY, round the multiplier to fourdecimal places. Then round the answer for each year to the nearestwhole dollar.
a. Straight-line method
| Year | Amount |
| 2014 | $ |
| 2015 | $ |
| 2016 | $ |
| 2017 | $ |
b. Units-of-output method
| Year | Amount |
| 2014 | $ |
| 2015 | $ |
| 2016 | $ |
| 2017 | $ |
c. Double-declining-balance method
| Year | Amount |
| 2014 | $ |
| 2015 | $ |
| 2016 | $ |
| 2017 | $ |
Comparing Three Depreciation Methods
Newbirth Coatings Company purchased waterproofing equipment onJanuary 2, 2011, for $340,000. The equipment was expected to have auseful life of four years, or 8,000 operating hours, and a residualvalue of $28,000. The equipment was used for 3,000 hours during2011, 2,500 hours in 2012, 1,400 hours in 2013, and 1,100 hours in2014.
Required:
1. Determine the amount of depreciation expensefor the years ended December 31, 2011, 2012, 2013, and 2014, by (a)the straight-line method, (b) the units-of-output method, and (c)the double-declining-balance method. Also determine the totaldepreciation expense for the four years by each method.
Note: FOR DECLINING BALANCE ONLY, round the multiplier to fourdecimal places. Then round the answer for each year to the nearestwhole dollar.
| DepreciationExpense | ||||||
| Year | Straight-LineMethod | Units-of-OutputMethod | Double-Declining-BalanceMethod | |||
| 2011 | $ | $ | $ | |||
| 2012 | $ | $ | $ | |||
| 2013 | $ | $ | $ | |||
| 2014 | $ | $ | $ | |||
| Total | $ | $ | $ | |||
2. What method yields the highest depreciationexpense for 2013?
SelectStraight-line methodUnits-of-outputmethodDouble-declining-balance methodAll three depreciationmethodsItem 16
3. What method yields the most depreciationover the four-year life of the equipment?
SelectStraight-line methodUnits-of-outputmethodDouble-declining-balance methodAll three depreciationmethods
Comparing Three Depreciation Methods
Waldum Company purchased packaging equipment on January 5, 2012,for $135,000. The equipment was expected to have a useful life ofthree years, or 18,000 operating hours, and a residual value of$13,500. The equipment was used for 8,600 hours during 2012, 5,300hours in 2013, and 4,100 hours in 2014.
Required:
1. Determine the amount of depreciation expensefor the years ended December 31, 2012, 2013, and 2014, by (a) thestraight-line method, (b) units-of-output method, and (c) thedouble-declining-balance method. Also determine the totaldepreciation expense for the three years by each method.
Note: FOR DECLINING BALANCE ONLY, round the multiplier to fourdecimal places. Then round the answer for each year to the nearestwhole dollar.
| DepreciationExpense | ||||||
|---|---|---|---|---|---|---|
| Year | Straight-LineMethod | Units-of-OutputMethod | Double-Declining-BalanceMethod | |||
| 2012 | $ | $ | $ | |||
| 2013 | $ | $ | $ | |||
| 2014 | $ | $ | $ | |||
| Total | $ | $ | $ | |||
