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Required information Problem 7-5A Determine depreciation under three methods (LO7-4) Skip to question [The following information applies to the questions displayed below.] University Car Wash

Required information

Problem 7-5A Determine depreciation under three methods (LO7-4)

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[The following information applies to the questions displayed below.]

University Car Wash built a deluxe car wash across the street from campus. The new machines cost $270,000 including installation. The company estimates that the equipment will have a residual value of $24,000. University Car Wash also estimates it will use the machine for six years or about 12,000 total hours. Actual use per year was as follows:

Year Hours Used
1 3,100
2 1,100
3 1,200
4 2,800
5 2,600
6 1,200

Problem 7-5A Part 2

2. Prepare a depreciation schedule for six years using the double-declining-balance method. (Do not round your intermediate calculations.)

Problem 7-5A Part 3

3. Prepare a depreciation schedule for six years using the activity-based method. (Round your "Depreciation Rate" to 2 decimal places and use this amount in all subsequent calculations.)

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