Question

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University Car Wash built a deluxe car wash across the street from campus. The new machines cost $267,000 including installation. The company estimates that the equipment will have a residual value of $24,000. 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	3,000
2	1,200
3	1,300
4	2,700
5	2,500
6	1,300

3. Prepare a depreciation schedule for six years using the activity-based method.

Answer 1