P10-2A Newbirth Coatings Co. purchased waterproofing equipment on Jan 2, 2009, for
AccountingCompare 3 depreciation methods
Accounting:By Carl S. Warren, James M. Reeve, Jonathan Duchac
PR 10-2A Newbirth Coatings Co. purchased waterproofing equipment on Jan 2, 2009, for $380,000. The equipment was expected to have a useful life of 4 years, or 8,000 operating hours, and a residual value of $36,000. The equipment was used for 3,000 hours during 2009, 2,500 in 2010, 1,400 in 2011 and 1,100 in 2012. Determine the amount of depreciation expense for the years ended Dec 31, 2009, 2010, 2011 and 2012 by
a) The straight-line method, (b) The units of production method and
(c) the double-declining balance method.
Also determine the total depreciation expense for the 4 years by each method.
The following headings are suggested:
STRAIGHT LINE METHOD —
UNITS OF PRODUCTION METHOD —
DOUBLE DECLINING BALANCE METHOD 2009
STRAIGHT LINE DEPRECIATION IS $86,000
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