Question
University Car Wash built a deluxe car wash across the street from campus. The new machines cost $213,000 including installation. The company estimates that the
University Car Wash built a deluxe car wash across the street from campus. The new machines cost $213,000 including installation. The company estimates that the equipment will have a residual value of $19,500. University Car Wash also estimates it will use the machine for six years or about 12,500 total hours. Actual use per year was as follows:
Year | Hours Used |
1 | 3,000 |
2 | 1,200 |
3 | 1,300 |
4 | 2,700 |
5 | 2,500 |
6 | 1,800 |
2. Prepare a depreciation schedule for six years using the double-declining-balance method. (Do not round your intermediate calculations.) Depreciation Accumulated Depreciation Book Value
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.) Same criteria as above |
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