Question

# Waylander Coatings Company purchased waterproofing equipment on January 6, 2015, for \$320,000. The equipment was expected...

Waylander Coatings Company purchased waterproofing equipment on January 6, 2015, for \$320,000. The equipment was expected to have a useful life of four years, or 20,000 operating hours, and a residual value of \$35,000. The equipment was used for 7,200 hours during 2015, 6,400 hours in 2016, 4,400 hours in 2017, and 2,000 hours in 2018.

Required:
1. Determine the amount of depreciation expense for the years ended December 31, 2015, 2016, 2017, and 2018, by (a) the straight-line method, (b) the units-of-output method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the four years by each method. (Note: For DECLINING BALANCE ONLY, round the answer for each year to the nearest whole dollar.)
2. What method yields the highest depreciation expense for 2015?
3.

What method yields the most depreciation over the four-year life of the equipment?

Determine the amount of depreciation expense for the years ended December 31, 2015, 2016, 2017, and 2018, by (a) the straight-line method, (b) the units-of-output method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the four years by each method.

 Depreciation Expense
 1 Year Straight-Line Method Units-of-Output Method Double-Declining-Balance Method 2 2015 3 2016 4 2017 5 2018 6 Total

2. What method yields the highest depreciation expense for 2015?

Straight-line method

Units-of-output method

Double-declining-balance method

All three depreciation methods

3. What method yields the most depreciation over the four-year life of the equipment?

Straight-line method

Units-of-output method

Double-declining-balance method

All three depreciation methods

1) Depreciation schedule :

Depreciation base : (320000-35000) = 285000

Depreciation rate = 285000/20000 = 14.25 per hour

Double decline rate = 100/4/*2 = 50%

 Straight line Unit of output Double decline 2015 285000/4 = 71250 7200*14.25 = 102600 320000*50% = 160000 2016 71250 6400*14.25 = 91200 160000*50% = 80000 2017 71250 4400*14.25 = 62700 80000*50% = 40000 2018 71250 2000*14.25 = 28500 5000 Total 285000 285000 285000

2) Double decline balance method

3) All three depreciation method

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