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Exercise 9-7: On January 1, 2015, the Morgantown Company ledger shows Equipment $39,100 and Accumulated DepreciationEquipment $10,540.

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Exercise 9-7:
On January 1, 2015, the Morgantown Company ledger shows Equipment $39,100 and Accumulated Depreciation―Equipment $10,540. The depreciation resulted from using the straight-line method with a useful life of 9 years and salvage value of $2,180. On this date, the company concludes that the equipment has a remaining useful life of only 5 years with the same salvage value.