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Computing the residual value

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Reference no: EM131086476

Diamond Autobody purchased some new equipment. The new equipment cost $90,000. The company estimates the equipment will have a residual value of $10,000. Diamond also estimates it will use the equipment for eight years or about 5,000 total hours.

Required:

Prepare a depreciation schedule for eight years using the following methods:

1. Straight-line.

2. Double-declining-balance.

3. Activity-based. Actual use per year was as follows:

Year

Hours Used

1

850

2

750

3

800

4

730

5

700

6

625

7

400

8

425

Reference no: EM131086476

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