Batangas State University is purchasing a new queuing system for its service improvement in Registrar’s office. The table that follows list the relevant cost itemsfor this purchase. The operating cost for the new system is expected to be five (5years). The salvage value for depreciation purposes is equal to 25% of the hardwarecost. Cost item Cost Hardware $160,000 Training $15,000 Installation $15,000 a. What is the book value of the device at the end of three years if the straight line method (SLM) is used? b. Supposed that after depreciating the device for two (2) years with the SLM, the firm decides to switch to the double-declining balance depreciation method for the remainder of the device’s useful life. What is the device’s book value at the end of four years?
10. Batangas State University is purchasing a new queuing system for its service improvement in Registrar’s office. The table that follows list the relevant cost itemsfor this purchase. The operating cost for the new system is expected to be five (5years). The salvage value for
Cost item Cost
Hardware $160,000
Training $15,000
Installation $15,000
a. What is the book value of the device at the end of three years if the
method
b. Supposed that after depreciating the device for two (2) years with the SLM,
the firm decides to switch to the double-declining balance depreciation
method for the remainder of the device’s useful life. What is the device’s book
value at the end of four years?
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