Answer:
1.
a. $30,667
a.1. $92,001
b. $41,308
b.1. $92,000
c. $65,334
c.1. $94,370
2.The method that yields the highest depreciation on year 1 is Double declining balance, in the amount of $65,334
3. The method that yields the most depreciation the 3 years is Double declining balance in the total amount of $94,370
Explanation:
1. A (straight line method)
(98,000-6,000) / 3 years = 30,667
A.1. 30,667 x 3 years = 92,001
B. (Units-of-activity method)
Formula : [(cost - salvage value) x hours for the preiod] / total eatimated hours
[(98,000-6,000) x 8,980 ] / 20,000
41,308
B.1. Year 1
[(98,000 -6,000) x 8,980] / 20,000
41,308
Year 2
[(98,000-6,000) x 6,930] / 20,000
31,878
Year 3
[(98,000-6,000) x 4,090] / 20,000
18,814
Thus, 41,308 + 31,878 + 18,814 = 92,000
C. (double declining method)
formula : 100% / years x 2
100%/3 x 2 = 66.67%
98,000 x .66667 = 65,334
C.1. Year 1 = 65,334
Year 2
(98,000 - 65,334) x .66667 =21,777
Year 3
(98,000 - 65,334 - 21,777) x .66667 = 7,259
Thus, 65,334 + 21,777 + 7,259 =94,370
