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University Car Wash built a deluxe car wash across the street from campus. The new machines cost $243,000 including installation. The company estimates that the
University Car Wash built a deluxe car wash across the street from campus. The new machines cost $243,000 including installation. The company estimates that the equipment will have a residual value of $28,500. 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:
s000000 urs 2.2 21 1.0 1.7 a123456 Required 1. Prepare a depreciation schedule for six years using the straight-line method. (D UNIVERSITY CAR WASH Depreciation Schedule-Straight-Line End of year amounts Depreciation Accumulated Expense Depreciation Year Book Value 35,750 $ 35,750 35,750 35,750 35,750 35,750 71,500 107,250 143,000 178,750 214,500 35,750S 207,250 171,500 135,750 100,000 64,250 28,500 4 Total 214,500 2. Prepare a depreciation schedule for six years using the double-declining-balance method. UNIVERSITY CAR WASH Depreciation Schedule-Double-Declining-Balance End of year amounts Year Depreciation Accumulated Expense Depreciation Book Value 80,190 80,190 S 53,727 35,997 24,118 16,159 4 4,308 Total 214,499 3. Prepare a depreciation schedule for six years using the activity-based method. (R UNIVERSITY CAR WASH Depreciation Schedule-Activity-Based End of year amounts Vear Depreciation Accumulated Depreciation Book Value Expense 4 TotalStep by Step Solution
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