Answer:
a.
Depreciation expense for 2021: $9,000
Depreciation expense for 2022: $9,000
b.
Depreciation expense for 2021: $18,000
Depreciation expense for 2022: $9,000
c.
Depreciation expense for 2021: $5,220
Depreciation expense for 2022: $6,660
Explanation:
a. Canseco Plumbing Fixtures uses Straight-line method
Annual Depreciation Expense = (Cost of asset − Residual value Value)/Useful Life = ($44,000 - $8,000)/4 = $9,000
Depreciation expense for 2021: $9,000
Depreciation expense for 2022: $9,000
b. Canseco Plumbing Fixtures uses Double-declining-balance method
Under the straight-line method, useful life is 4 years, so the equipment's annual depreciation will be 25% of the Depreciable cost.
Depreciable cost = Total asset cost - Residual value = $44,000-$8,000 = $36,000
Under the double-declining-balance method the 25% straight line rate is doubled to 50% - multiplied times the Depreciable cost's book value at the beginning of the year.
In 2021, depreciation expense = 50% x $36,000 = $18,000
At the beginning 2022, the Depreciable cost's book value is $36,000-$18,000 = $18,000
Depreciation expense in 2022 = 50% x $18,000 = $9,000
c. Canseco Plumbing Fixtures uses Units-of-activity method
The Units-of-activity depreciation method is calculated by using the following formula:
Depreciation Expense = [(Cost of asset − Residual value)/Life in Number of hours Operated]x Number of hours Operated] = Depreciation Expense per hour x Number of hours Operated
Depreciation Expense per hour = ($44,000-$8,000)/20,000 = $1.8
Depreciation expense each year = Actual hours Operated x Depreciation Expense per hour.
Depreciation expense for 2021 = 2,900 x $1.8 = $5,220
Depreciation expense for 2022 = 3,700 x $1.8 = $6,660
