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E9.4 (LO 2) Lafrenire Inc., reported the following information about two of its machines as at December 31, 2019. Date Useful Life (in Residual Machine
E9.4 (LO 2) Lafrenire Inc., reported the following information about two of its machines as at December 31, 2019. Date Useful Life (in Residual Machine Acquired Cost years) Value Jan. 1, 2011 $800,000 20 $40,000 #2 Jan. 1, 2019 120,000 5 5,000 #1 Instructions a. Calculate the annual depreciation for each asset using the straight-line method. b. Calculate the accumulated depreciation and carrying amount of each asset on December 31, 2020. c. If the company determined at the beginning of 2021 that machine #2 now has a residual value of $10,000, would you expect the accumulated depreciation as at December 31, 2020, to change? If so, would it likely increase or decrease? Discuss and calculate depletion on a natural resource asset
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