Question
Kame Company Limited purchased an automatic hole-punching machine priced at $5700. The vendors invoice includes sales tax of $1263. Kame also paid the inbound transportation
Kame Company Limited purchased an automatic hole-punching machine priced at $5700. The vendors invoice includes sales tax of $1263. Kame also paid the inbound transportation charges of $1350 on a new machine, as well as the labor cost of $1500 to install the machine in the factory. In addition, Kame had to prepare the site at a cost of $1450 before installation. Compute the double-declining-balance (DDB) depreciation schedule for the following data for the asset useful life of 5 years and estimated salve value is $778. Suppose the asset has zero salvage value instead of $778, determine the optimal time to switch to straight-line depreciation.
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