Comparing three depreciation methods Waylander Coatings Company purchased waterproofing equipment on January 6 for $357,600. The equipment was expected to have a useful life of 4 years, or 8,000 operating hours, and a residual value of $29,600. The equipment was used for 3,000 hours during Year 1, 2,500 hours in Year 2, 1,400 hours in Year 3, and 1,100 hours in Year 4. Required: 1. Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the 4 years by each method.Note: FOR DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then, round the answer for each year to the nearest whole dollar. Year Straight-LineMethod Units-of-ActivityMethod Double-Declining-Balance Method Year 1 $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 Year 2 fill in the blank 4 fill in the blank 5 fill in the blank 6 Year 3 fill in the blank 7 fill in the blank 8 fill in the blank 9 Year 4 fill in the blank 10 fill in the blank 11 fill in the blank 12 Total $fill in the blank 13 $fill in the blank 14 $fill in the blank 15 2. What method yields the highest depreciation expense for Year 1? 3. What method yields the most depreciation over the 4-year life of the equipment?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 13PA: Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value...

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Question

Comparing three depreciation methods

Waylander Coatings Company purchased waterproofing equipment on January 6 for $357,600. The equipment was expected to have a useful life of 4 years, or 8,000 operating hours, and a residual value of $29,600. The equipment was used for 3,000 hours during Year 1, 2,500 hours in Year 2, 1,400 hours in Year 3, and 1,100 hours in Year 4.

Required:

1. Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the 4 years by each method.

Note: FOR DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then, round the answer for each year to the nearest whole dollar.

Year	Straight-Line Method	Units-of-Activity Method	Double-Declining- Balance Method
Year 1	$fill in the blank 1	$fill in the blank 2	$fill in the blank 3
Year 2	fill in the blank 4	fill in the blank 5	fill in the blank 6
Year 3	fill in the blank 7	fill in the blank 8	fill in the blank 9
Year 4	fill in the blank 10	fill in the blank 11	fill in the blank 12
Total	$fill in the blank 13	$fill in the blank 14	$fill in the blank 15