Diamond Autobody purchased some new equipment. The new equipment cost $90,000. The company estimates the equipment will have a residual value of $10,000. Diamond also estimates it will use the equipment for eight years or about 5,000 total hours.
Required:
Prepare a depreciation schedule for eight years using the following methods:
1. Straight-line.
2. Double-declining-balance.
3. Activity-based. Actual use per year was as follows:
|
Year
|
Hours Used
|
|
1
|
850
|
|
2
|
750
|
|
3
|
800
|
|
4
|
730
|
|
5
|
700
|
|
6
|
625
|
|
7
|
400
|
|
8
|
425
|