Answer:
1.
A. Years 1 =$30,667
Year 2 = $30,667
Years 3 =$30,666
B. Year 1 = $41,308
Year 2 = $31,878
Year 3 = $18,814
C. Year 1 = $65,333
Year 2 = $21,778
Year 3 = $7260
2. The double declining method
3. The double declining method
Explanation:
Straight line depreciation =( Cost of equipment - Salvage value) / useful life
($98,000 - $6,000) / 3 = $30,666.67
Depreciation expense each year = $30,666.67
Deprecation expense for
Year 1 =$30,667
Year 2 = $30,667
Year 3 = $92,000 - $30667 = $30,666
Total depreciation = $92,000
Deprecation expense under the unit of activity method = actual operating hours each year × (cost of asset - Salvage value) / estimated total operating hours
For year 1 = 8,980 × ($92,000 / 20,000) = 8980 × 4.6 = $41,308
For year 2 = 6,930 × 4.6 = $31,878
For year 3 = 4090 × 4.6 = $18,814
Total depreciation = $92,000
For double declining method :
Depreciation expense = Net book value × multiplier
Multiplier = 2 × (1 / useful life)
2 × (1/3) = 0.66667
Net book value × multiplier
For year 1 = 0.66667 × $98,000 =$65,333
Net book value = $98,000 - $65,333 = $32,667
For year 2 = 0.66667 × $32,667 = $21,778
Net book value = $32,667 - $21,778 = $10,889
For year 3 = 0.66667 × $10,889= $7260
Total depreciation = $94,371
