On January 1, 2011, the Peninsula Paper Company Purchased Manufacturing

Essay

On January 1, 2011, the Peninsula Paper Company purchased manufacturing equipment for $600,000. The equipment has a 4-year estimated useful life and a salvage value of $22,500. The company expects to use the equipment for 275,000 hours. Actual hours the equipment was used are provided in the table below:

Required: Calculate the depreciation expense for each year of the asset's life using:
1. the straight-line method,
2. the double-declining balance method, and
3. the activity (units-of-production) method