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Business, 29.05.2021 01:00 jjelzy

Kaia Co. purchased a new manufacturing machine for $605,000. The machine was shipped from Europe at a cost of $11,000. Kaia also paid $7,000 in custom fees. The machine was secured to the building foundation at a cost of $2,000. It is estimated that the machine will have a $25,000 salvage value at the end of its 4-year useful service life. The maximum estimated production is 30,000: 12,000 in year one, 8,000 in year two, 6,000 in year three, and 4,000 in year four, respectively. Instructions: Compute the total cost, then using the straight line, units of activity, prepare a schedule that shows the 1) annual depreciation expense, 2) annual accumulated depreciation, and 3) net book value on the machine for each of the years in its 4-year life.

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