Cheetah Copy purchased a new copy machine. The new machine cost $120,000 including installation. The company estimates the equipment will have a residual value of $30,000. Cheetah Copy also estimates it will use the machine for four years or about 8,000 total hours. Actual use per year was as follows: YearHours Used12,50022,20031,90042,000 3. Prepare a depreciation schedule for four years using the activity-based method. (Round your "Depreciation Rate" to 3 decimal places and use this amount in all subsequent calculations.) CHEETAH COPYDepreciation Schedule—Activity-BasedEnd of Year AmountsYearDepreciation ExpenseAccumulated DepreciationBook Value1 2 3 4 Total

Depreciation Expense ( under activity-based method ) = Cost of asset - Residual valueEstimated total…

Answered: Cheetah Copy purchased a new copy…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Cheetah Copy purchased a new copy machine. The new machine cost $120,000 including installation. The company estimates the equipment will have a residual value of $30,000. Cheetah Copy also estimates it will use the machine for four years or about 8,000 total hours. Actual use per year was as follows:

Year	Hours Used
1	2,500
2	2,200
3	1,900
4	2,000

3. Prepare a depreciation schedule for four years using the activity-based method. (Round your "Depreciation Rate" to 3 decimal places and use this amount in all subsequent calculations.)