ITEM 1

Company "B" purchased in January 2015 a machine with a purchase cost of 10.000.000 by moving the current account. The useful life of the machine was estimated at 8 years and the residual value was zero. The company follows the method of fixed depreciation for the calculation of depreciation of tangible assets. The management of the company estimated the net present value of the expected cash flows from the use of the machine as well as the fair value of the machine (minus the disposal costs) on 31.12.2015 and 31.12.2016 as follows:

	31.12.2015	31.12.2016
Net present value of expected cash flows	7.600.000,00	6.600.000,00
Fair Value of the machine (less disposal costs)	7.980.000,00	6.300.000,00

The company has the purpose of holding the machine for the duration of its remaining useful life.

It is requested: To calculate the book value with which the machine will appear in the Balance Sheet (Statement of Financial Position) on 31.12.2015 and 31.12.2016, after providing the relevant calculations and to enter the calendar entries concerning the fixed asset from the market until 31.12.2016.