Problem 7-5A (Algo) Determine depreciation under three methods (LO7-4) [The following information applies to the questions displayed below.] University Car Wash purchased new soap dispensing equipment that cost $231,000 including installation. The company estimates that the equipment will have a residual value of $25,500. 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 1 2 3 4 5 6 Problem 7-5A (Algo) Part 1 Year 1 2 3 4 5 Hours Used 2,900 1,800 1,900 2,100 1,900 1,900 Required: 1. Prepare a depreciation schedule for six years using the straight-line method. (Do not round your intermediate calculations.) UNIVERSITY CAR WASH Depreciation Schedule-Straight-Line End of Year Amounts Depreciation Expense Accumulated Depreciation Book Value
Problem 7-5A (Algo) Determine depreciation under three methods (LO7-4) [The following information applies to the questions displayed below.] University Car Wash purchased new soap dispensing equipment that cost $231,000 including installation. The company estimates that the equipment will have a residual value of $25,500. 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 1 2 3 4 5 6 Problem 7-5A (Algo) Part 1 Year 1 2 3 4 5 Hours Used 2,900 1,800 1,900 2,100 1,900 1,900 Required: 1. Prepare a depreciation schedule for six years using the straight-line method. (Do not round your intermediate calculations.) UNIVERSITY CAR WASH Depreciation Schedule-Straight-Line End of Year Amounts Depreciation Expense Accumulated Depreciation Book Value
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter7: Operating Assets
Section: Chapter Questions
Problem 79.3C
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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![Required information
Problem 7-5A (Algo) Determine depreciation under three methods (LO7-4)
[The following information applies to the questions displayed below.]
University Car Wash purchased new soap dispensing equipment that cost $231,000 including installation. The company
estimates that the equipment will have a residual value of $25,500. 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
1
2
3
4
Year
1
2
3
4
5
5
6
Hours Used
2,900
1,800
1,900
2,100
Problem 7-5A (Algo) Part 1
1,900
1,900
Required:
1. Prepare a depreciation schedule for six years using the straight-line method. (Do not round your intermediate calculations.)
UNIVERSITY CAR WASH
Depreciation Schedule-Straight-Line
End of Year Amounts
Depreciation
Expense
Accumulated
Depreciation
Book Value
S](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdc7c5ec4-6458-48ac-b580-7110d1dd08da%2Fad946ce5-34fc-4136-845f-be449da467a1%2Fudgfqz2_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
Problem 7-5A (Algo) Determine depreciation under three methods (LO7-4)
[The following information applies to the questions displayed below.]
University Car Wash purchased new soap dispensing equipment that cost $231,000 including installation. The company
estimates that the equipment will have a residual value of $25,500. 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
1
2
3
4
Year
1
2
3
4
5
5
6
Hours Used
2,900
1,800
1,900
2,100
Problem 7-5A (Algo) Part 1
1,900
1,900
Required:
1. Prepare a depreciation schedule for six years using the straight-line method. (Do not round your intermediate calculations.)
UNIVERSITY CAR WASH
Depreciation Schedule-Straight-Line
End of Year Amounts
Depreciation
Expense
Accumulated
Depreciation
Book Value
S
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