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Accounting Problems For Accounting Tutors Only 1

Problem #2:  Comparethree depreciation methods

Breyer Company purchased packaging equipment on January 3,2010, for $101,250. The equipment was expected to have a useful life of threeyears, or 25,000 operating hours, and a residual value of $7,500. The equipmentwas used for 9,500 hours during 2010,8,400 hours in 2011, and 7,100 hours in2012.

Instructions (be sure to show all of your work, allcalculations to receive full credit)

1. Determine the amount of depreciation expense forthe years ended December 31, 2010, 2011, and 2012, by

a. the straight-line method,  

b. the units-of-production method, and

c. the double-declining-balance method.

2. Also determine the total depreciationexpense for the three years by each method.

The following columnar headings are suggested for recordingthe depreciation expense amounts (record the totals at the bottom of eachcolumn):


Year  Straight-LineMethod  Units-of-Production Method  Double-Declining-Balance Method

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