Reference no: EM132500992

1. Traverse City Cherry Company purchased a new piece of harvest machinery in January 2017 for $250,000. They estimated the useful life to be five years and used straight-line depreciation with no expected salvage value. It became evident near the end of year 2019 (third year of use) that the machine's operational value has been impaired to the point that its expected future cash flows are reasonably estimated to be $60,000 over the remaining two years. At the end of the year 2019, the machine's fair market value is approximately $75,000. At what amount should the machinery be reported on the 12/31/19 balance sheet?

A 25 000 B 60 000
C 75 000 D 100 000

2 Radcliffe, Inc. purchased a new conveyor belt system for $40,000 to use in its plant. The company uses double-declining balance (DDB) depreciation. The conveyor system has an estimated life of five years and a salvage value of five percent or $2,000. What is the depreciation expense on the conveyor belt system in the second year of its estimated life?

A 6 840 B 9 120
C 9 600 D 16 000