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A company purchased a weaving machine for $190,000. The machine has a useful life of 8 years and a residual value of $10,000.

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Answer #1

Depreciation rate per bolt = (190,000-10,000)/75,000 = 2.40 per bolt

Depreciation for first year = 15,000*2.40 = 36,000

Depreciation for second year = 19,000*2.40 = 45,600

Accumulated Depreciation = 36,000+45,600 = 81,600

Book value at the end of second year

= 190,000 - Accumulated Depreciation 81,600

= 108,400

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