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A bus company has decided to purchase a new bus for $85,000 with a trade-in of their old bus. The old bus has a BV
A bus company has decided to purchase a new bus for $85,000 with a trade-in of their old bus. The old bus has a BV of $10,000 at the time of the trade-in. The new bus will be kept for 10 years before being sold. Its estimated salvage value at that time is expected to be $5,000. Use DDB (double-declining balance method) with switchover to SL (straigh-line) depreciation method when the depreciation is higher to compute the annual depreciation allowances and the resulting book values.
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