The amount of depreciation expense for the years ended December 31, 2012, 2013, 2014, and 2015, for Layton Company is determined as follows:
<h3>(a) the straight-line method:</h3>
2012: $33,600
2013: $33,600
2014: $33,600
2015: $0
<h3>(b) the units-of-output method:</h3>
2012: $11,340 (1,350 x $8.40)
2013: $35,280 (4,200 x $8.40)
2014: $30,660 (3,650 x $8.40)
2015: $23,520 (2,800 x $8.40)
<h3>(c) the double-declining-balance method:</h3>
2012: $71,993 ($108,000 x 0.6666)
2013: $24,002 ($36,007 x 0.6666)
2014: $4,805 ($12,005 - 7,200))
2015: $0
<h3>Data and Calculations:</h3>
Cost of equipment = $108,000
Useful life = 3 years
Operating hours = 12,000
Residual value = $7,200
Depreciable amount = $100,800 ($108,000 - $7,200)
Straight-line depreciation rate = $33,600 per year ($100,800/3)
Units-of-output method rate = $8.40 per hour ($100,800/12,000)
Double-declining-balance method rate = 66.6666 (100/3)
Thus, the depreciation expenses for the years ended December 31, 2012, 2013, 2014, and 2015, for Layton Company have been determined using (a) the straight-line method, (b) the units-of-output method, and (c) the double-declining-balance method.
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