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Italian Construction Company purchased a new crane for $470,000 at the beginning of year 1. The crane has an estimated residual value of $60,000 and
Italian Construction Company purchased a new crane for $470,000 at the beginning of year 1. The crane has an estimated residual value of $60,000 and an estimated useful life of five years. The crane is expected to last 200,000 hours. It was used 50,000 hours in year 1; 45,000 hours in year 2; 45,500 hours in year 3; 35,000 hours in year 4; and 25,000 hours in year 5.
Compute the annual depreciation and carrying value (book value) for the crane for each year assuming the following depreciation methods:
Straight line Depreciation Annual Depreciation Accumulated Depreciation Cost Carrying Value Date of Purchase End of First Year End of Second Year End of Third Year End of Fourth Year End of Fifth Year Units of Production Method Unit of Production Annual Depreciation Accumulated Depreciation Carrying Value Cost Date of Purchase End of First Year End of Second Year End of Third Year End of Fourth Year End of Fifth Year Declining Balance (Double Declining) Method Annual Depreciation Accumulated Depreciation Cost Carrying Value Date of Purchase End of First Year End of Second Year End of Third Year End of Fourth Year End of Fifth YearStep by Step Solution
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