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Depreciation Stahmann Products paid $350,000 for a numerical controller during the last month of 2007 and had it installed at a cost of $50,000. The recovery period was 7 years with an estimated salvage value of 10% of the original purchase price. Stahmann sold the system at the end of 2011 for $45,000. Determine the Book Value at the end of 2011 using a Straight line method and DDB b. Can you use Sum of Years Digit method? Why? c. Was the sale at $45,000 profitable? Write your complete solution in a blank paper. Box your answers

Depreciation Stahmann Products paid $350,000 for a numerical controller during the last month of 2007 and had it installed at a cost of $50,000. The recovery period was 7 years with an estimated salvage value of 10% of the original purchase price. Stahmann sold the system at the end of 2011 for $45,000. Determine the Book Value at the end of 2011 using a Straight line method and DDB b. Can you use Sum of Years Digit method? Why? c. Was the sale at $45,000 profitable? Write your complete solution in a blank paper. Box your answers

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Depreciation Stahmann Products paid $350,000 for a numerical controller during the last month of 2007 and had it installed at a cost of $50,000. The recovery period was 7 years with an estimated salvage value of 10% of the original purchase price. Stahmann sold the system at the end of 2011 for $45,000. Determine the Book Value at the end of 2011 using a. Straight line method and DDB b. Can you use Sum of Years Digit method? Why? c. Was the sale at $45,000 profitable? Write your complete solution in a blank paper. Box your answers
Transcribed Image Text:Depreciation Stahmann Products paid $350,000 for a numerical controller during the last month of 2007 and had it installed at a cost of $50,000. The recovery period was 7 years with an estimated salvage value of 10% of the original purchase price. Stahmann sold the system at the end of 2011 for $45,000. Determine the Book Value at the end of 2011 using a. Straight line method and DDB b. Can you use Sum of Years Digit method? Why? c. Was the sale at $45,000 profitable? Write your complete solution in a blank paper. Box your answers
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