Problem 7-5A (Algo) Determine depreciation under three methods (LO7-4)
University Car Wash purchased new soap dispensing equipment that 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. 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
Problem 7-5A (Algo) Part 2
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
Year Depreciation Expense Accumulated Depreciation Book Value
1 $ 80,000 $ 80,000 $ 160,000
2 53,333 133,333 106,667
3 35,556 168,889 71,111
4 23,703 192,592 47,408
5 17,408 210,000 30,000
6 210,000 30,000
Total $ 210,000
