Copy Equipment Was Acquired at the Beginning of the Year

question 167

Essay

Copy equipment was acquired at the beginning of the year at a cost of $72,000 that has an estimated residual value of $9,000 and an estimated useful life of five years. It is estimated that the machine will output an estimated 1,000,000 copies. This year, 315,000 copies were made. Determine the
(a) depreciable cost,
(b) depreciation rate, and
(c) units-of-activity depreciation for the year.

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Definitions:

Modern Economics

A branch of social science that studies how individuals, businesses, and governments make choices on allocating resources to satisfy their needs and wants.

The Wealth of Nations

A seminal book by Adam Smith, which discusses economics, the importance of free markets, division of labor, and productivity.

Labor

The physical and mental effort used in the production of goods and services.

Good

A material item or service that can be bought, sold, or traded, providing utility or satisfaction to the buyer.