Reference no: EM131703522

Question - Comparing Three Depreciation Methods

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 2016, and 2,000 hours in 2018.

Required:

1. Determine the amount of depreciation expense for the years ended December 31, 2015, 2016, 2017, 2018, by (a) the straight-line method, (b) units-of-output method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the four years by each method. Do not round your intermediate calculations.

Year Straight-line Method Units of output method Double declining balance method.

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?