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Thank you for help! 1. (8 points) Robert Parish Corporation purchased a new machine for its assembly process on January 1, 2014. The cost of
Thank you for help!
1. (8 points) Robert Parish Corporation purchased a new machine for its assembly process on January 1, 2014. The cost of this machine was $855,000. The company estimated that the machine would have a salvage value of $55,000 at the end of its service life. Its life is estimated at 4 years, and its working hours are estimated at 80,000 hours. Year-end is December 31 . Instructions Compute the depreciation expense under the following methods and complete the depreciation schedules below. (a) Straight-line depreciation. (b) Activity method, assuming that machine usage was 26,000 hours for 2014; 24,000 hours for 2015; 16,000 hours for 2016 and 14,000 hours for 2017. (c) Sum-of-the-years'-digits. (d) Double-declining-balance. 3. (5 points) A building was constructed last year for Agro Co. for use as a production facility. Construction began on January 1 and was completed on December 31. The payments to the contractor were as follows. To finance construction of the building, a $1,100,000,10.5% construction loan was taken out on January 1 . The loan was repaid on December 31 . The firm had two sources of general debt: $800,000 note payable, 9% annual interest, and $1,200,000 par value bonds, 12% annual interest. Determine the amount of interest to be capitalizedStep by Step Solution
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