Razar Sharp Company purchased equipment on July 1, 2014, for$70,470. The equipment was expected to have a useful life of threeyears, or 5,940 operating hours, and a residual value of $2,160.The equipment was used for 1,100 hours during 2014, 2,100 hours in2015, 1,800 hours in 2016, and 940 hours in 2017. Required:Determine the depreciation expense for the years ended December 31,2014, 2015, 2016, and 2017 using double-declining method
Razar Sharp Company purchased equipment on July 1, 2014, for$70,470. The equipment was expected to have a useful life of threeyears, or 5,940 operating hours, and a residual value of $2,160.The equipment was used for 1,100 hours during 2014, 2,100 hours in2015, 1,800 hours in 2016, and 940 hours in 2017. Required:Determine the depreciation expense for the years ended December 31,2014, 2015, 2016, and 2017 using double-declining method
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 | $ |
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? |
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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
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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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