Required information Problem 7-5A Determine depreciation under three methods (LO7-4) [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 $261,000 including installation. The company estimates that the equipment will have a residual value of $27,000. 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 1 Hours Used 2,800 2 1,400 3 1,500 4 2,500 5 2,300 6 1,500 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.) Answer is complete but not entirely correct. UNIVERSITY CAR WASH Depreciation Schedule-Double-Declining-Balance End of year amounts Year Depreciation Accumulated Book Value Expense Depreciation 1 $ 39,000 $ 39,000 $ 222,000 2 39,000 78,000 183,000 3 39,000 117,000 144,000 4 39,000 156,000 105,000 5 39,000 195,000 66,000 6 39,000 234,000 27,000 Total $ 234,000 Required information Problem 7-5A Determine depreciation under three methods (LO7-4) [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 $261,000 including installation. The company estimates that the equipment will have a residual value of $27,000. 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 1 Hours Used 2,800 2 1,400 3 1,500 4 2,500 5 6 2,300 1,500 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.) UNIVERSITY CAR WASH Depreciation Schedule-Activity-Based End of year amounts Year Depreciation Expense 1 2 3 4 5 6 Total $ Accumulated Depreciation Book Value