Hugo Ltd Has Acquired a Machine for $26,000 and It

question 48

Short Answer

Hugo Ltd has acquired a machine for $26,000 and it cost a further $2,000 to install and set up the machine for operation.It is expected to operate within normal parameters for 6 years.It will be technologically obsolete in 10 years.The expected salvage values are $1,500 after 10 years and $2,000 after 6 years.The benefits to be derived from the machine are expected to be greater in the early years of its life.What depreciation should be charged in each of the first 2 years of the equipment's life using sum-of-digits depreciation?

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Definitions:

25th Percentile

The value below which 25% of the data falls, also known as the first quartile or Q1.

Q1

The first quartile in a data set, marking the value below which 25% of the data points fall.

Q2

The second quartile in a data set, also known as the median, which divides a data set into two equal halves.

Q3

The third quartile in a data set, representing the midpoint between the median and the highest value of the dataset.