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Two friends create a company called Dream at the beginning of 2017. They each contribute with 20 000 to the capital of the company. They
Two friends create a company called Dream at the beginning of 2017. They each contribute with 20 000 to the capital of the company. They paid for equipment costing 10 000 . This equipment is depreciated using the units-of-production method, no salvage value. The equipment is used for manufacturing purposes only. The useful life of this equipment is measured in units, it will reach the end of its useful life when it reaches 1000 manufactured units. They also purchase an initial stock of raw materials for 25 000, of which 15 000 are paid cash. At the end of the year, 10 000 remain to be paid. During 2017, the company has: Manufactured 200 units of finished goods, unit cost is 100. Sold finished goods for 55 000, paid cash. Paid manufacturing salaries for 8 000 . Paid several administrative expenses for 8 000 . At the end of the period, the physical count of the inventory yields the following figures: Raw materials: 15000 . Finished goods: 50 units. The depreciation expense for the period is
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