Question

Check my work Problem 7-5B Determine depreciation under three methods (L07-4) /The following information applies to the questions displayed below! Part 3 of 3 Cheetah Copy purchased a new copy machine. The new machine cost $108,000 including installation. The company estimates the equipment will have a residual value of $27,000. Cheetah Copy also estimates it will use the machine for four years or about 8,000 total hours. Actual use per year was as follows: Year 1.66 points Hours Used 3,000 2.000 1,600 2,400 eBook Problem 7-5B Part 3 Print In References 3. Prepare a depreciation schedule for four years using the activity-based method. (Round your "Depreciation Rate" to 3 decimal places and use this amount in all subsequent calculations.) CHEETAH COPY Depreciation Schedule-Activity-Based End of Year Amounts Depreciation Accumulated Expense Depreciation Book Value Year 2 Total

Answer 1

Depreciation rate = (cost -residual value)/total hours =(108000-27000)/8000=81000/8000=10.125

	Cheetah copy Depreciation schedule-activity based End of year accounts
Year	depreciation expense	accumulated depreciation	book value
1	30375 (10.125*3000)	30375	77625 (108000-30375)
2	20250 (10.125*2000)	50625	57375 (108000-50625)
3	16200 (10.125*1600)	66825	41175 (108000-66825)
4	14175 (81000-66825)	81000 (108000-27000)	27000 (108000-81000)
Total	81000