Question

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

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.)

Year UNIVERSITY CAR WASH Depreciation Schedule—Activity-Based End of year amounts Depreciation Accumulated Book Value Expense Depreciation 51,100 34,675 36,500 36,500 32,850 27,375 $ 219,000 Total

Answer 1

3) Depreciation schedule

Year	Depreciation expense	Accumulated depreciation	Book value
1	51100	51100	194900
2	34675	85775	160225
3	36500	122275	123725
4	36500	158775	87225
5	32850	191625	54375
6	27375	219000	27000
Total	219000