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Ramer Inc. manufactures sporting goods. The following information applies to a machine purchased on January 1, 2013:
Purchase price ............ $ 80,000Delivery cost ............ $ 2,500Installation charge .......... $ 850Estimated life ............ 5 yearsEstimated units ............ 160,000Salvage estimate ........... $ 3,350
During 2013, the machine produced 35,000 units and during 2014, it produced 36,000 units.
Required:
Determine the amount of depreciation expense for 2013 and 2014 using each of the following methods:
a. Straight line. b. Double declining balance. c. Units of production. d. MACRS, assuming that the machine is classified as seven year property.
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