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After a meeting with upper management Mr. Robot Ltd. (Mr. Robot) concluded they would need a new super computer to reduce their production time and
After a meeting with upper management Mr. Robot Ltd. (Mr. Robot) concluded they would need a new super computer to reduce their production time and cost of the company's current production process. On January 2016 they purchased a new super computer for $150,000. The computer was estimated to have a six-year useful life and a residual value of $15,000. In February 2020, Mr. Robot paid $98,000 to overhaul the entire computer system. The overhaul upgraded to the latest technology and extended its useful life by an additional two years. In May 2020, the computer broke down and required servicing to get it to operate properly. The servicing cost $10,000. Mr. Robot's year-end is December 31. The estimated residual value remained $15,000, unchanged throughout the period.
What would be the depreciation expense in each year of the equipment's life, assuming that Mr. Robot uses straight-line depreciation?
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