Al’s Car Wash purchased a piece of equipment on October 1, 20×7, for $27,000. The equipment has an estimated life of four years or 40,000 units of production and an estimated residual value of $2,000. Compute depreciation for 20×7, 20×8, and 20×9 using the following methods: (a) straight-line, (b) production, and (c) double-declining-balance. Assume that the company’s fiscal year corresponds to the calendar year and that 3,000, 12,000, and 8,000 units were produced in the respective years. (Show your work.)

 Al’s Car Wash purchased a piece of equipment on October 1, 20×7, for $27,000. The equipment has an estimated life of four years or 40,000 units ofproduction and an estimated residual…

 

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