Answer:
Straight line depreciation method : $43,200, $43,200, $43,200
Unit of activity deprecation method = $51,840, $38,880, $38,880
Double declining method = $90,000, $30,000, $10,000
Total depreciation expense
Straight line depreciation and unit of activity method = $129,600
Double declining method = $130,000
Step-by-step explanation:
Depreciation is a method used in expensing the cost of an asset.
the straight-line method = (Cost of asset - Salvage value) / useful life
( $135,000 - $5,400) / 3 = $43,200
The straight line depreciation method allocates the same deprecation expense for each year of the useful life of the asset. So, the depreciation expense for the 3 years is $43,200.
Total depreciation expense = $43,200 × 3 = $129,600
the units-of-activity method =( hours used in year / total hours of the machine) x (Cost of asset - Salvage value)
Deprecation expense in the first year =
( $135,000 - $5,400) × (10,800 / 27,000) =
$129,600 × 0.4 = $51,840
Deprecation expense in the second year
( $135,000 - $5,400) × (8,100 / 27,000) = $129,600 × 0.3 = $38,880
Deprecation expense in the third year
( $135,000 - $5,400) × (8,100 / 27,000) = $129,600 × 0.3 = $38,880
Total depreciation expense = $129,600
Double declining method = depreciation factor × cost of the asset
Depreciation factor = 2 x (1/useful life)
Deprecation factor = 2 / 3 = 0.666667
Depreciation in the first year =
0.666667 x $135,000 = $90,000
Book value = $135,000 - $90,000 = $45,000
Deprecation expense in the second year =
0.666667 x $45,000 = $30,000
Book value = $45,000 - $30,000 = $15,000
Deprecation expense in the third year =
0.666667 x $15,000 = $10,000
Total depreciation expense = $130,000
I hope my answer helps you