Reference no: EM131959346

Problem

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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. (Do not round your intermediate calculations.)
2. Prepare a depreciation schedule for six years using the double-declining-balance method. (Do not round your intermediate calculations.)
3. Prepare a depreciation schedule for six years using the activity-based method.