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Calculate the depreciation expense-accumulated depreciation

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Question

Assume that Machado Company purchased a CT Scanner on January 1, 2016, for $60,000. The CT Scanner has an estimated life of five years and an estimated residual value of $6,000. Machado's accountant is considering whether to use the straight-line or the units-of-production method to depreciate the asset. Because the company is beginning a new fiscal year, the scanner will be used to run for 10,000 "units" in 2016, but use subsequent to 2016 will increase by 10,000 "units" each year.

Required: Calculate the depreciation expense, accumulated depreciation, and book value of the CT Scanner under both methods for each of the five years of its life.

Reference no: EM132385622

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