Problem 7-5B Determine depreciation under three methods (LO7-4) [The following information applies to the questions displayed below.] Cheetah Copy purchased a new copy machine. The new machine cost $106,000 including installation. The company estimates the equipment will have a residual value of $26,500. 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: Hours Used 2,800 2,000 2,000 3,200 Year Problem 7-5B Part 3 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 COPY Depreciation Schedule-Activity-Based End of Year Amounts Depreciation Expense Accumulated Year Book Value Depreciation 1 $ 27,832 $ 27,832 $ 78,168 2 19,880 47,712 58,288 19,880 67,592 38,408 4 Total $ 67,592 1234

Problem 7-5B Determine depreciation under three methods (LO7-4) [The following information applies to the questions displayed below.] Cheetah Copy purchased a new copy machine. The new machine cost $106,000 including installation. The company estimates the equipment will have a residual value of $26,500. 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: Hours Used 2,800 2,000 2,000 3,200 Year Problem 7-5B Part 3 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 COPY Depreciation Schedule-Activity-Based End of Year Amounts Depreciation Expense Accumulated Year Book Value Depreciation 1 $ 27,832 $ 27,832 $ 78,168 2 19,880 47,712 58,288 19,880 67,592 38,408 4 Total $ 67,592 1234

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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The answer is, $4,880, you forgot to add the mileage. Mileage is .16 X 500= $80 + $4,800= $4,880
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