Red Tiger Company purchased packaging equipment on January 3, 2005, for
$180,000. The equipment was expected to have a useful life of 3 years, or 22,320
operating hours, and a residual value of $12,600. The equipment was used for 12,500 hours during 2005, 6,000 hours in 2006, and 3,820 hours in 2007.
Determine the amount of depreciation expense for the years ended December 31,
2005, 2006, and 2007, by (a) the straight-line method, (b) the units-of -production
Method, and (c ) the declining-balance method, using twice the straight-line rate.
Also determine the total depreciation expense for the three years by each method.
The expert examines Red Tiger Company depreciation.