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3 years have past since Tom purchased his Shoe Manufacturing Machine, and it has created so much additional business that he has decided to perform
3 years have past since Tom purchased his Shoe Manufacturing Machine, and it has created so much additional business that he has decided to perform a major improvement to the machine that will increase the amount of shoes it can produce and how long it will last. He is wondering how this might effect his valuation of the machine and the depreciation expenses going forward. Calculate the new value of the machine based on cost, depreciation to date, and the betterment & then calculate the new depreciation expense to be recorded for the coming yem The betterment has added an additional 5 years onto Tom's original anticipation of 25 total years. Betterment Costs: Annual oil change $ 15,000.00 Annual replacement of gears and pullies $ 8,500.00 25,000.00 Installation of imrpoved engine increasing operating length $ Addition of extra production module increasing production S 30,000.00 Actual production over the past 3 years is listed below: Year 1 3,000.00 Year 2 7,500.00 Year 3 12,450.00 Estimated Production in the coming few years Year 4 13,500.00 Year 5 15,000.00 Year 6 15,500.00
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