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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.)
QUESTION: 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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