Question: University Car Wash built a deluxe car wash across the street from campus. The new machines cost $240,000 including installation. The company estimates that the equipment will have a residual value of $30,000. University Car Wash also estimates it will use the machine for six years or about 12,000 total hours.
Required: Prepare a depreciation schedule for six years using the following methods:
1. Straight-line.
2. Double-declining-balance.
3. Activity-based. Actual use per year was as follows:
Year Hours Used
1 2,600
2 2,100
3 2,200
4 1,800
5 1,600
6 1,700