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Diamond Autobody purchased new equipment for $90,000. Residual value at the end of an estimated four-year service life is expected to be $10,000. During the
Diamond Autobody purchased new equipment for $90,000. Residual value at the end of an estimated four-year service life is expected to be $10,000. During the four-year period, the company expects to use the equipment a total of 5,000 hours. Required: Prepare a depreciation schedule for the four-year life of the equipment using the following methods: 1. Straight-line. 2. Double-declining-balance. 3. Activity-based. Actual use per year was as follows: Year Hours Used 1,200 1,400 1,500 1,100 1 2 3 4 Please use the charts on the following page. Straight Line Year Depreciable Amount Depreciation Rate Depreciation Expense Accumulated Depreciation Book Value 2 3 4 Double-Declining Balance Year Depreciable Amount Depreciation Rate Depreciation Expense Accumulated Depreciation Book Value 1 2 4 Activity-Based Book Value Depreciable Amount Year Depreciation Rate Accumulated Depreciation Depreciation Expense 2 3 4
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