ITEM 1 Company "B" purchased in January 2015 a machine with a purchase cost of 10.000.000 € by moving the current accoun

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ITEM 1
Company "B" purchased in January 2015 a machine with a purchase
cost of 10.000.000 € by moving the current account. The useful life
of the machine was estimated at 8 years and the residual value was
zero. The company follows the method of fixed depreciation for the
calculation of depreciation of tangible assets. The management of
the company estimated the net present value of the expected cash
flows from the use of the machine as well as the fair value of the
machine (minus the disposal costs) on 31.12.2015 and 31.12.2016 as
follows:
31.12.2015
31.12.2016
Net present value of expected cash flows
7.600.000,00
6.600.000,00
Fair Value of the machine (less disposal costs)
7.980.000,00
6.300.000,00€
The company has the purpose of holding the machine for the
duration of its remaining useful life.
It is requested: To calculate the book value with which the
machine will appear in the Balance Sheet (Statement of Financial
Position) on 31.12.2015 and 31.12.2016, after providing the
relevant calculations and to enter the calendar entries concerning
the fixed asset from the market until 31.12.2016.