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Banko Inc. manufactures sporting goods. The following information applies to a machine purchased on January 1, Year 1: During Year 1, the machine produced 40,000
Banko Inc. manufactures sporting goods. The following information applies to a machine purchased on January 1, Year 1:
During Year 1, the machine produced 40,000 units and during Year 2, it produced 42,000 units.
Required
Determine the amount of depreciation expense for Year 1 and Year 2 using each of the following methods:
PurchasepriceDeliverycostInstallationchargeEstimatedlifeEstimatedunitsSalvageestimate$67,000$6,000$3,0005years144,000$4,000 \begin{tabular}{|l|l|l|l|} \hline \multicolumn{2}{|l|}{} & Year 1 & Year 2 \\ \hline a. & Straight-line & & \\ \hline b. & Double-declining-balance & & \\ \hline c. & Units of production & & \\ \hline \end{tabular}Step by Step Solution
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