Seal Coatings Company purchased waterproofing equipment on January 2, 2007, for $475,000. The equipment was expected to have a useful life of four years, or 21,500 operating hours, and a residual value of $45,000. The equipment was used for 7,600 hours during 2007, 6,800 hours in 2008, 5,100 hours in 2009, and 2,000 hours in 2010.
Instructions
Determine the amount of depreciation expense for the years ended December 31, 2007, 2008, 2009, and 2010, 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 four years by each method. The following columnar headings are suggested for recording the depreciation expense amounts:
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Depreciation Expense |
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Straight |
Units of |
Double Declining |
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Line |
Production |
Balance |
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Year |
Method |
Method |
Method |