Question

The hartley clinic purchased a new surgical laser for $9000. The estimated salvage value is $5000. The laser has a useful life of five years and the clinic expects to us it $10000 hours. It was used 1600 hours in year 1; 2200 hours in year 2; 2400 in year; 1800 hours in a year; 2000 hours in year 5

Answer 1

Answer and Explanation:

The computation is shown below:

Years Straight line Units of production

Year 1 ($90,000 - $5,000 ÷ 5) 1,600 × 8.5 = $13,600

= $17,000

Year 2 $17,000 2200 × 8.5 = $18,700

Year 3 $17,000 2400 × 8.5 = $20400

Year 4 $17,000 1,800 × 8.5 = $15,300

Year 5 $17,000 2000 × 8.5 = $17,000

Total $85,000 $85,000

The 8.5 come from

= ($90,000 - $5,000) ÷ (10,000 hours)

= 8.5

hence, the units of production would be most appropriate