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Question - 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
Required - Prepare a depreciation schedule for six years using the activity-based method.
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