Answer to Question 1
1. Straight-line method
Year Depreciation expense
2011 18,750 = (80,000 5,000) / 4 years
2012 18,750
2013 18,750
2014 18,750
2. Double-declining method
Year Depreciation expense
2011 40,000 = (2/4) x 80,000
2012 20,000 = (2/4) x 40,000
2013 10,000 = (2/4) x 20,000
2014 5,000 = (2/4) x 10,000
3. Activity (units of production) method
(80,000 5,000) / 300,000 hours = 0.25 per hour
Year Depreciation Expense
2011 25,000 = 100,000 hours 0.25
2012 20,000 = 80,000 hours 0.25
2013 12,500 = 50,000 hours 0.25
2014 17,500 = 70,000 hours 0.25
Answer to Question 2
True