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Sneetch Inc

question 45

Essay

Sneetch Inc. purchased a star-making machine on 1/1/2011. The cost of the machine was $17,000. Its estimated residual value was $2,000 at the end of an estimated 10-year life.
a. Calculate depreciation expense for 2011 and 2012 using the straight-line method.
b. Calculate depreciation expense for 2011 and 2012 using the double-declining balance method.
c. Calculate the net book value of the machine as of 12/31/2012 under straight -line depreciation.
d. Calculate the net book value of the machine as of 12/31/2012 under double-declining-balance depreciation.


Definitions:

Supply Curve

A graphical representation that shows the relationship between the price of a good and the quantity of the good that suppliers are willing and able to produce and sell.

Total Variable Costs

The overall expense that changes in proportion to the level of output or production activity.

Output

The total amount of goods or services produced by a company, industry, or economy within a specific period.

Supply Curve

A graphical representation showing the relationship between the price of a good or service and the quantity of that good or service that a supplier is willing and able to supply.

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