University Car Wash built a deluxe car wash across the street from campus. The new machines cost $240,000 including installation. The company estimates that the equipment will have a residual value of $30,000. 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 2,600 2 2,100 3 2,200 4 1,800 5 1,600 6 1,700 1)Prepare a depreciation schedule for six years using the double-declining-balance method. 2)Prepare a depreciation schedule for six years using the activity-based method
University Car Wash built a deluxe car wash across the street from campus. The new machines cost $240,000 including installation. The company estimates that the equipment will have a residual value of $30,000. 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 2,600 2 2,100 3 2,200 4 1,800 5 1,600 6 1,700 1)Prepare a depreciation schedule for six years using the double-declining-balance method. 2)Prepare a depreciation schedule for six years using the activity-based method
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 5MC: A machine with a 4-year estimated useful life and an estimated 15% residual value was acquired on...
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University Car Wash built a deluxe car wash across the street from campus. The new machines cost $240,000 including installation. The company estimates that the equipment will have a residual value of $30,000. 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 | 2,600 |
| 2 | 2,100 |
| 3 | 2,200 |
| 4 | 1,800 |
| 5 | 1,600 |
| 6 | 1,700 |
1)Prepare a
2)Prepare a depreciation schedule for six years using the activity-based method
Transcribed Image Text:2. Prepare a depreciation schedule for six years using the double-declining-balance method. (Do not round your intermediate
calculations.)
UNIVERSITY CAR WASH
Depreciation Schedule-Double-Declining-Balance
End of year amounts
Depreciation
Expense
Accumulated
Year
Book Value
Depreciation
1
4
Total
$
2.
3.
5
Transcribed Image Text: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
Depreciation
Expense
Accumulated
Year
Book Value
Depreciation
1
2
4
5
6
Total
$
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