Question: University Car Wash built a deluxe car wash across the street from campus. The new machines 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
1 2,800
2 1,400
3 1,500
4 2,500
5 2,300
6 2,000
1. Prepare a depreciation schedule for six years using the activity-based method.