! Required information [The following information applies to the questions displayed below.] University Car Wash purchased new soap dispensing equipment that cost $219,000 including installation. The company estimates that the equipment will have a residual value of $19,500. 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 Hours Used 123456 2,800 1,400 1,500 2,500 2,300 2,000 2. Prepare a depreciation schedule for six years using the double-declining-balance method. (Do not round your intermediate calculations.) UNIVERSITY CAR WASH Depreciation Schedule-Double-Declining-Balance End of Year Amounts Depreciation Accumulated Year Book Value Expense Depreciation 1 $ 72,993 $ 72,993 2 4,866,423 3 4 5 6 Total $ 4,939,416
! Required information [The following information applies to the questions displayed below.] University Car Wash purchased new soap dispensing equipment that cost $219,000 including installation. The company estimates that the equipment will have a residual value of $19,500. 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 Hours Used 123456 2,800 1,400 1,500 2,500 2,300 2,000 2. Prepare a depreciation schedule for six years using the double-declining-balance method. (Do not round your intermediate calculations.) UNIVERSITY CAR WASH Depreciation Schedule-Double-Declining-Balance End of Year Amounts Depreciation Accumulated Year Book Value Expense Depreciation 1 $ 72,993 $ 72,993 2 4,866,423 3 4 5 6 Total $ 4,939,416
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Required information
[The following information applies to the questions displayed below.]
University Car Wash purchased new soap dispensing equipment that cost
$219,000 including installation. The company estimates that the equipment
will have a residual value of $19,500. 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
Hours Used
123456
2,800
1,400
1,500
2,500
2,300
2,000
2. Prepare a depreciation schedule for six years using the double-declining-balance method.
(Do not round your intermediate calculations.)
UNIVERSITY CAR WASH
Depreciation Schedule-Double-Declining-Balance
End of Year Amounts
Depreciation
Accumulated
Year
Book Value
Expense
Depreciation
1
$
72,993 $
72,993
2
4,866,423
3
4
5
6
Total $
4,939,416](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F76da996e-3ade-4bf8-ad9b-454e707dbc28%2F11aef7fc-15b4-408a-b362-f0eda8a33a7d%2Fy6sih9n_processed.png&w=3840&q=75)
Transcribed Image Text:!
Required information
[The following information applies to the questions displayed below.]
University Car Wash purchased new soap dispensing equipment that cost
$219,000 including installation. The company estimates that the equipment
will have a residual value of $19,500. 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
Hours Used
123456
2,800
1,400
1,500
2,500
2,300
2,000
2. Prepare a depreciation schedule for six years using the double-declining-balance method.
(Do not round your intermediate calculations.)
UNIVERSITY CAR WASH
Depreciation Schedule-Double-Declining-Balance
End of Year Amounts
Depreciation
Accumulated
Year
Book Value
Expense
Depreciation
1
$
72,993 $
72,993
2
4,866,423
3
4
5
6
Total $
4,939,416
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