Question: Cheetah Copy purchased a new copy machine. The new machine cost $120,000 including installation. The company estimates the equipment will have a residual value of $30,000. Cheetah Copy also estimates it will use the machine for four years or about 8,000 total hours.
Required: Prepare a depreciation schedule for four years using the following methods:
1. Straight-line.
2. Double-declining-balance. ( The asset will be depreciated in only two years.)
3. Activity-based. Actual use per year was as follows:
Year Hours Used
1 2,500
2 2,200
3 1,900
4 2,000