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Martha Run Buys a New Duplicating Machine for $20,000 with a Residual

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Martha Run buys a new duplicating machine for $20,000 with a residual value of $2,000. Its estimated life is five years. Using the declining-balance method, calculate the book value at the end of year 1, assuming twice the straight-line rate.

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$20,000 × .4 = $8,00...

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