Required information Problem 7-5A (Algo) Determine depreciation under three methods (LO7-4) [The following information applies to the questions displayed below.] University Car Wash purchased new soap dispensing equipment that cost $231,000 including installation. The company estimates that the equipment will have a residual value of $25,500. University Car Wash also estimates it will use the machine for six years or about 12,500 total hours. Actual use per year was as follows: Year 1 2 3 4 5 6 Hours Used 2,900 1,800 1,900 2,100 1,900 1,900
Required information Problem 7-5A (Algo) Determine depreciation under three methods (LO7-4) [The following information applies to the questions displayed below.] University Car Wash purchased new soap dispensing equipment that cost $231,000 including installation. The company estimates that the equipment will have a residual value of $25,500. University Car Wash also estimates it will use the machine for six years or about 12,500 total hours. Actual use per year was as follows: Year 1 2 3 4 5 6 Hours Used 2,900 1,800 1,900 2,100 1,900 1,900
Chapter8: Depreciation And Sale Of Business Property
Section: Chapter Questions
Problem 6MCQ: Which of the following is not true about the MACRS depreciation system: A salvage value must be...
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![Required information
Problem 7-5A (Algo) Determine depreciation under three methods (LO7-4)
[The following information applies to the questions displayed below.]
University Car Wash purchased new soap dispensing equipment that cost $231,000 including installation. The company
estimates that the equipment will have a residual value of $25,500. University Car Wash also estimates it will use the
machine for six years or about 12,500 total hours. Actual use per year was as follows:
Year
1
2
3
4
5
6
Year
1
2
3
Hours Used
2,900
1,800
1,900
Problem 7-5A (Algo) Part 3
3. Prepare a depreciation schedule for six years using the activity-based method. (Round your "Depreciation Rate" to 2 decimal
places and use this amount in all subsequent calculations.)
▶
2,100
1,900
1,900
UNIVERSITY CAR WASH
Depreciation Schedule-Activity-Based
End of Year Amounts
Depreciation
Expense
Accumulated
Depreciation
Book Value](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdc7c5ec4-6458-48ac-b580-7110d1dd08da%2F89a4efd5-7012-4b57-9023-e6cc0b62d080%2Fwbty03o_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
Problem 7-5A (Algo) Determine depreciation under three methods (LO7-4)
[The following information applies to the questions displayed below.]
University Car Wash purchased new soap dispensing equipment that cost $231,000 including installation. The company
estimates that the equipment will have a residual value of $25,500. University Car Wash also estimates it will use the
machine for six years or about 12,500 total hours. Actual use per year was as follows:
Year
1
2
3
4
5
6
Year
1
2
3
Hours Used
2,900
1,800
1,900
Problem 7-5A (Algo) Part 3
3. Prepare a depreciation schedule for six years using the activity-based method. (Round your "Depreciation Rate" to 2 decimal
places and use this amount in all subsequent calculations.)
▶
2,100
1,900
1,900
UNIVERSITY CAR WASH
Depreciation Schedule-Activity-Based
End of Year Amounts
Depreciation
Expense
Accumulated
Depreciation
Book Value
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