Question
Cheetah Copy purchased a new copy machine. The new machine cost $102,000 including installation. The company estimates the equipment will have a residual value of
Cheetah Copy purchased a new copy machine. The new machine cost $102,000 including installation. The company estimates the equipment will have a residual value of $25,500. Cheetah Copy also estimates it will use the machine for four years or about 8,000 total hours. Actual use per year was as follows:
Year | Hours Used |
1 | 2,000 |
2 | 1,200 |
3 | 2,000 |
4 | 3,000 |
Required:
1. Prepare a depreciation schedule for four years using the straight-line method. (Do not round your intermediate calculations.)
2. Prepare a depreciation schedule for four years using the double-declining-balance method. (Hint: The asset will be depreciated in only two years.) (Do not round your intermediate calculations.)
3. Prepare a depreciation schedule for four years using the activity-based method. (Round your "Depreciation Rate" to 3 decimal places and use this amount in all subsequent calculations.)
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