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The cash price of this machine was $48500. Related expenditures included: sales tax $$1700, shipping costs $200, insuance during shipping $50, installation and testing costs
The cash price of this machine was $48500. Related expenditures included: sales tax $$1700, shipping costs $200, insuance during shipping $50, installation and testing costs $120, and $200 of oil and lubricants to be used with the machinery during its first first year of operations. Riverbed estimates that the useful life of machine is 5 years with a $4750 salvage value remaining at the end of that time period. Assume that the straight line method of depreciation is used.
Machine B: The recorded cost of this machine was $180000. Riverbed estimates that the useful life of the machine is 4 years with a $9900 salvage value remaining at the end of that time period
calcuate the amount of depreciation expense that Riverbed should record for Machine B each year of its useful life under the following assumptions.
1. Riverbed uses the straight line method of depreciation.
2. Riverbed uses the declining balance method. The rate used is twice the straight line rate.
3. Riverbed uses the Units of Activity method and estimates that the useful life of machine is 157,500 units. Actual usage is as follows: 2021, 53500 units, 2021, 43000 units, 2022, 32,500 units, 2023, 28,500 units
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