Mickeys Company has an asset it bought 5 years ago at a cost of $500,000...
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Accounting
Mickeys Company has an asset it bought 5 years ago at a cost of $500,000 that has a current book value of $350,000. The expected net future net cash flow of the asset is $95,000 with a present value of $90,000. Assume that Mickeys will continue to use this asset in the future. As of December 31, Y5, the asset has a salvage value of $30,000 and is expected to produce 1,000 units. Mickeys uses an activity based depreciation method.
How much depreciation should be taken on the equipment for Y6 assuming 400 units were produced in Y6?
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