Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Dexter Industries purchased packaging equipment on January 8 for $72,000. The equipment was expected to have a useful life of three years, or 18,000 operating hours, and a residual value of $4,500. The equipment was used for 7,600 hours during Year 1, 6,000 hours in Year 2, and 4,400 hours in Year 3.
1) Straight-line:
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (72,000 - 4,500)/3= $22,500
2) Units of activity:
Annual depreciation= [(original cost - salvage value)/useful life of production in units]*hours of use
Year 1= [(72,000 - 4,500)/18,000]*7600= 28,500
Year 2= 3.75*6,000= 22,500
Year 3= 4,400*3.75= 16,500
3) double declining:
Annual depreciation= 2*[(original cost - residual value)/estimated life (years)]
Year 1= [(72,000-4,500)/3]*2= 45,000
Year 2= (22,500/3)*2= 15,000
Year 3= (7,500/3)*2= 5,000