Health Guard Labs, a pharmaceutical company, recently purchased a new pill dispensing machine. The purchase price was $24,500, the estimated residual value was $10,000, and the estimated useful life is five years. Additional expenditures during the first year of use were as follows: 1. Sales tax $750 2. Assembly $450 3. Maintenance repairs $2,500 4. Replacement parts $3,600 5. New battery to increase energy efficiency $670 Instructions: 1. Determine the machine asset value at year end of year one. 2. Create a depreciation schedule for year one and two for the dispensing machine by using the straight line method. 3. Create a depreciation schedule for year one and two for the dispensing machine by using the double declining method.
Health Guard Labs, a pharmaceutical company, recently purchased a new pill dispensing machine. The purchase price was $24,500, the estimated residual value was $10,000, and the estimated useful life is five years. Additional expenditures during the first year of use were as follows: 1. Sales tax $750 2. Assembly $450 3. Maintenance repairs $2,500 4. Replacement parts $3,600 5. New battery to increase energy efficiency $670 Instructions: 1. Determine the machine asset value at year end of year one. 2. Create a depreciation schedule for year one and two for the dispensing machine by using the straight line method. 3. Create a depreciation schedule for year one and two for the dispensing machine by using the double declining method.
Fundamentals of Financial Management (MindTap Course List)
14th Edition
ISBN:9781285867977
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter12: Cash Flow Estimation And Risk Analysis
Section: Chapter Questions
Problem 10P: REPLACEMENT ANALYSIS The Dauten Toy Corporation currently uses an injection molding machine that was...
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Problem #2
Health Guard Labs, a pharmaceutical company, recently purchased a new pill dispensing machine. The
purchase price was $24,500, the estimated residual value was $10,000, and the estimated useful life is
five years. Additional expenditures during the first year of use were as follows:
1. Sales tax $750
2. Assembly $450
3. Maintenance repairs $2,500
4. Replacement parts $3,600
5. New battery to increase energy efficiency $670
Instructions:
1. Determine the machine asset value at year end of year one.
2. Create a
the straight line method.
3. Create a depreciation schedule for year one and two for the dispensing machine by using the double declining method.
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