University Car Wash built a deluxe car wash across the street from campus. The new machines cost $237,000 includinginstallation. The company estimates that the equipment will have a residual value of $28,500. University Car Wash alsoestimates it will use the machine for six years or about 12,500 total hours. Actual use per year was as follows:YearHours Used2,7002,0002,1001,9001,7002,10042. Prepare a depreciation schedule for six years using the double-declining-balance method. (Do not round your intermediatecalculations.)UNIVERSITY CAR WA SHDepreciation Schedule-Double-Declining-BalanceEnd of year amountsDepreciationExpenseAccumulatedYearBook ValueDepreciation1346.Total%24

Formula: Depreciation rate = 100 / useful life

University Car Wash built a deluxe car wash across the street from campus. The new machines cost $237,000 including installation. The company estimates that the equipment will have a residual value of $28,500. 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 1 2,700 2,000 2,100 1,900 1,700 2,100 4

University Car Wash built a deluxe car wash across the street from campus. The new machines cost $237,000 including installation. The company estimates that the equipment will have a residual value of $28,500. 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 1 2,700 2,000 2,100 1,900 1,700 2,100 4

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter17: Activity Resource Usage Model And Tactical Decision Making

Section: Chapter Questions

Problem 26P: St. Johns Medical Center (SJMC) has five medical technicians who are responsible for conducting...

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University Car Wash built a deluxe car wash across the street from campus. The new machines cost $246,000 including installation. The company estimates that the equipment will have a residual value of $27,000. 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 1 2,800 2 1,900 3 2,000 4 2,000 5 1,800 6 1,500 Problem 7-5A 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.)
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