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What is the historical cost of the asset recorded on books

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Question - On January, 1, Year One, Richards Ice Cream Shoppe acquired a new machine which will make their popular product faster and creamier. Mary, the owner, spent $10,000 on the machine. Mary also paid $500 to ship the equipment, $350 to install, $750 to train employees, and $1,000 to market their improved product to customers. The machine is estimated to have an 8-year useful life and a salvage value of $1,000. Mary uses straight-line depreciation.

1. What is the historical cost of the asset recorded on the books?

2. What is the depreciable base of the asset?

3. What is the depreciation expense to be recorded in Year 1?

4. What is the depreciation expense to be recorded in Year 4?

5. What is the net book value of the asset at the end of Year 1?

6. What is the net book value of the asset at the end of Year 4?

Reference no: EM133170574

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