A company purchased a computer on 1 July 2014. The computer has an estimated useful life of 5 years and will have no residual value. It was purchased for $10 000. It is estimated that the computer can be used for 5 000 hours. The computer was used for 450 hours during 2014. If the goal is to record higher depreciation expense in the earlier years, which method should be used?

Question

Quizplus · Accepted Answer

The reducing-balance method results in higher depreciation expenses in the earlier years compared to other methods.

A Company Purchased a Computer on 1 July 2014