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Question
Mackerel Company purchased equipment on January 2, 2010 for $100,000. The equipment had an estimated eight-year service life and $5,000 salvage value. Mackerel's policy for "eight-year assets" is to use double-declining balance depreciation for the first five years of the asset's life and then switch to the straight-line depreciation method.
Required:
In its December 31, 2012 balance sheet, what amount should Mackerel report as net book value for this equipment?
Answer
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