Apex Fitness Club uses straight-line depreciation for a machine costing $23,860, with an estimated fouryear life and a $2,400 salvage value. At the beginning of the third year, Apex determines that the machine has three more years of remaining useful life, after which it will have an estimated $2,000 salvage value. Compute (1) the machine’s book value at the end of its second year and (2) the amount of depreciation for each of the final three years given the revised estimates.
Apex Fitness Club uses straight-line depreciation for a machine costing $23,860, with an estimated fouryear life and a $2,400 salvage value. At the beginning of the third year, Apex determines that the machine has three more years of remaining useful life, after which it will have an estimated $2,000 salvage value. Compute (1) the machine’s book value at the end of its second year and (2) the amount of depreciation for each of the final three years given the revised estimates.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Apex Fitness Club uses straight-line
life and a $2,400 salvage value. At the beginning of the third year, Apex determines that the machine
has three more years of remaining useful life, after which it will have an estimated $2,000 salvage value.
Compute (1) the machine’s book value at the end of its second year and (2) the amount of depreciation for
each of the final three years given the revised estimates.
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