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Question 4 (Points possible: 0.4pt/year * 15 = 6) Buena Vista Regional Hospital purchased a new MRI machine having the following characteristics: Cost......... $1,171,000 Estimated
Question 4 (Points possible: 0.4pt/year * 15 = 6) Buena Vista Regional Hospital purchased a new MRI machine having the following characteristics: Cost......... $1,171,000 Estimated useful life (years) 5 Residual value $246,000 Furthermore, the hospital estimates the machine's usage (in hours) to be the following: Total hours of service during useful life 20,000 Hours of service during year 1 3,474 Hours of service during year 2 3,838 Hours of service during year 3 3,546 Hours of service during year 4 4,192 Hours of service during year 5 4,950 Use the double-declining-balance method of depreciation to complete the following table. Book value at beginning Depreciation expense of year for year $1,171,000 Accumulated depreciation at end of year Book value at end of year Year 1 Year 2 Year 3 Year 4 Year 5 Use the units-of-service method of depreciation to complete the following table. Note: If performing calculations by hand, you can round the depreciation rate to the nearest two decimal places before completing the table. Using a rounded depreciation rate, your final (year 5) book value should still be within $100 of the correct amount. Book value at beginning Depreciation expense of year for year Accumulated depreciation at end of year Book value at end of year Year 1 Year 2 Year 3 Year 4 Year 5
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