According to Lee, by developing collaborative relationships with suppliers and customers, employing postponement, building a dep
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Answer:
$6150.
Explanation:
Given:
Tomko Company purchased machinery with a list price of $96,000.
10% discount by the manufacturer.
They paid $600 for shipping and sales tax of $4,500.
Tomko estimates that the machinery will have a useful life of 10 years and a residual value of $30,000.
If Tomko uses straight-line depreciation, annual depreciation will be ?
<u>Solution:</u>
List price of machinery = $96,000
Discount amount = 10% of 96,000
Shipping cost = $600
Sales tax = $4,500
Actual cost of machinery = List price - Discount amount + Shipping cost + Sales tax
Actual cost of machinery = $96000 - $9600 + $600 + $4500
= $91,500
Residual value = $30,000
Useful life = 10 years
As we know:
Thus, annual depreciation of machinery of Tomko Company will be $6150.