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On January 1, 2019, Santo Company Purchased a Computer System

question 99

Essay

On January 1, 2019, Santo Company purchased a computer system for $30,500.The system had an estimated useful life of five years and no salvage value.At January 1, 2021, the company revised the remaining useful life to two years.What amount of depreciation will be recorded for 2021 and 2022?


Definitions:

Interest Rate

A cost, depicted as a proportion of the borrowed sum, which a lender demands from a borrower in exchange for asset usage.

Rational Behavior

A theory in economics suggesting that individuals make decisions based on maximizing utility and firms aim to maximize profits.

Smooth Convex Preferences

Preferences characterized by continuous and consistently increasing utility, indicating a reasoned and balanced choice pattern.

Borrow

The act of receiving something of value in exchange for the promise to return it or its equivalent value at a later date.

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