On 1 January 2017 a company purchased a machine at a cost of $6,000. Its useful life is estimated to be 10 years and then it has no residual value.

At 31 December 2019 it was estimated that the machine could be sold for $5,500. However, if the company could make a maintenance to the machine, it would be sold for $9,000. The maintenance fee was $1,000. And the company needed to pay a delivery fees of $1,000.

At the same time, if the company continued to use the machine, management estimated that it would generate net cash inflows with a present (discounted) value of $8,000.

New plant of the same type would cost $9,000 at 31 December 2019.

(1) Calculate the amount of value for this asset shown in the financial statement at the year-end 2019 (use the straight-line depreciation method)

(2) Calculate these values of this machine at the year-end 2019: net realizable value, economic value, and net replacement cost

(3) Calculate the deprival value of this machine at year-end 2019

(4) Explain the meaning of deprival value in this case

(5) Use this case to discuss the advantages and disadvantages of historical cost method.

(6) If you try to write a research paper based on this case with a stance of advocating alternatives to the historical cost method, would this paper be positive accounting theory or normative accounting theory?