The Nichols clinic purchased a new surgical laser for 96000. The estimated salvage value is 6000. The laser has a useful life of 5 years and the clinic
expects to use it at 10000 hours. It was used 1600 hours in year 1. 2200 hours in year 2. 24000 in year 3. 2300 hours in year 4. 2000 hours in year 5.
Instructions: Compute the annual depreciation for each of the five years under each of the following methods.
(1) straight line (2) units of activity.
(b) If you were the administrator of the clinic which method would you deem as most appropiate? Justify your answer.
(c) Which method would result in the lowest reported income in the first year? Which method would result in the lowest total reported income over the 5 year
period?
~~~~~Please show solution and explanation. Thank you