On January 1, 2016, Martini, Inc. acquired a machine for $1,050,000. The estimated useful life of the asset is five years. Residual value at the end of five years is estimated to be $100,000. What is the book value of the machine at the end of 2017 if the company uses the straight-line method of depreciation

$670,000

Explanation:

For computing the book value, first we have to determine the depreciation expense using the straight line method which is shown below:

= (Original cost - residual value) ÷ (estimated useful life)

= ($1,050,000 - $100,000) ÷ (5 years)

= ($950,000) ÷ (5 years)  

= $190,000

In this method, the depreciation is same for all the remaining useful life

Now the book value is

= Original cost - depreciation expense × number of years

= $1,050,000 - $190,000 × 2

= $1,050,000 - $380,000

= $670,000

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.