Question: 1. A company purchases a machine for $96,000 on January 1, 2011. Its useful life is five years or 100,000 units of product, and its salvage value is $8,000. During 2011, 10,000 units of product are produced. Compute the book value of this machine on December 31, 2011, assuming
(a) straight-line depreciation and
(b) units-of-production depreciation.
2. Explain the difference between revenue expenditures and capital expenditures and how both are recorded.