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Perdue Company purchased equipment on October 1 for $36,100. The equipment was expected to have a useful life of three years, or 4,900 operating hours, and a residual value of $1,800. The equipment was used for 900 hours during Year 1, 1,700 hours in Year 2, 1,500 hours in Year 3, and 800 hours in Year 4.

Required: Round up all final values

Straight line Method

Sagot :

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Under the straight-line depreciation method, the depreciation expenses for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, for Perdue Company, are as follows:

Year Amount

Year 1 $2,858.33 ($11,4333.33 x 3/12)

Year 2 $11,433.33

Year 3 $11,433.33

Year 4 $8,575.01 ($11,433.34 - $2,858.33)

What is the straight-line depreciation method?

The straight-line method is one of the depreciation methods in use by companies to allocate the cost of plants and equipment over their useful lives.

Under the straight-line method, the depreciable amount (cost less residual value) is divided by the estimated useful life.

Other depreciation methods include the unit-of-production, double-declining-balance, and the sum-of-the-years-digit methods.

Data and Calculations:

Equipment cost = $36,100

Residual value = $1,800

Depreciable amount = $34,300 ($36,100 - $1,800)

Estimated useful life = 3 years

Annual depreciation = $11,433.33 ($34,300/3)

Learn more about the straight-line depreciation method at https://brainly.com/question/27258396

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Question Completion:

Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by the straight-line method.

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