1. Equipment for immersion cooling of electronic components has an installed value of $175,000 with an estimated trade-in value of $35,000 after 15 years. A capital recovery utilizing the Matheson Formula was used.   How much was the total capital recovered from on year 10 and how much is the book value of the components?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Please answer both questions:

 

1. Equipment for immersion cooling of electronic components has an installed value of $175,000 with an estimated trade-in value of $35,000 after 15 years. A capital recovery utilizing the Matheson Formula was used.

 

How much was the total capital recovered from on year 10 and how much is the book value of the components?

 

 

 

2. Youngblood Shipbuilding Yard just purchased $750,000 in capital equipment for ship repairing functions on dry-docked ships. Estimated salvage is $120,000 after 15 years of use. Calculate the annual depreciation charge and the total deprecation charge as well as the book value for the 10th year if Sum-of-the-Years Digit was used in recovering the capital spent.

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