Problem 4 (30 points)

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. 1 1,200

2. 2 1,400

3. 3 1,500

4. 4 1,100

Please use the charts on the following page.