Question
University Car Wash built a deluxe car wash across the street from campus. The new machines cost $234,000 including installation. The company estimates that the
University Car Wash built a deluxe car wash across the street from campus. The new machines cost $234,000 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 | Hours Used |
1 | 2,800 |
2 | 1,900 |
3 | 2,000 |
4 | 2,000 |
5 | 1,800 |
6 | 1,500 |
1. Prepare a depreciation schedule for six years using the straight-line method. 2. Prepare a depreciation schedule for six years using the double-declining-balance method. 3. Prepare a depreciation schedule for six years using the activity-based method. |
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