Reference no: EM133184955

Question - Supreme Auto Service opened a new service center three decades ago. At the time the center was preparing to open, new equipment was purchased totaling $377,000. Residual value of the equipment was estimated to be $47,000 after 20 years. The Company accountant has been using straight-line depreciation on the equipment.

(a) How much was the annual depreciation for the original equipment (in $)?

(b) If the hydraulic lift had originally cost $15,080, what would its residual value (in 15) be after 20 years?

(c) After six years of operation, the original hydraulic lift was replaced with a new model that cost $23,000. Book value was allowed for the old machine as a trade-in. What was the old hydraulic lift's book value when the replacement machine was bought (in $)?

(d) What was the book value of the equipment inventory at the six-year point, substituting the new hydraulic lift for the original after the new lift had joined the inventory (in $)?