Required information [The following information applies to the questions displayed below.] University Car Wash built a deluxe car wash across the street from campus. The new machines cost $252,000 including installation. The company estimates that the equipment will have a residual value of $24,000. 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: Hours Used 3,000 1,700 1,800 2,200 2,000 1,300 Year 4 5
Required information [The following information applies to the questions displayed below.] University Car Wash built a deluxe car wash across the street from campus. The new machines cost $252,000 including installation. The company estimates that the equipment will have a residual value of $24,000. 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: Hours Used 3,000 1,700 1,800 2,200 2,000 1,300 Year 4 5
Chapter1: Financial Statements And Business Decisions
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Problem 1Q
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Required information
[The following information applies to the questions displayed below.]
University Car Wash built a deluxe car wash across the street from campus. The new machines cost $252,000
including installation. The company estimates that the equipment will have a residual value of $24,000. 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
3,000
1,700
1,800
2,200
2,000
1,300
1
3
4
5.
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Required information
[The following information applies to the questions displayed below.]
University Car Wash built a deluxe car wash across the street from campus. The new machines cost $252,000
including installation. The company estimates that the equipment will have a residual value of $24,000. 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
3,000
1,700
1,800
2,200
2,000
1,300
1
3
4
5.
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T
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Required:
1. Prepare a depreciation schedule for six years using the straight-line method. (Do not round your intermediate calculations.)
UNIVERSITY CAR WASH
Depreciation Schedule-Straight-Line
End of year amounts
Accumulated
Depreciation
Expense
Year
Book Value
Depreciation
1
2
3
4
6.
Total
$
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Expert Solution
Step 1 Introduction
The depreciation expense is charged on fixed assets as reduced value of the fixed asset with usage and the passage of time.
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