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Anna71 [15]
3 years ago
13

The cash price of this machine was $54,500. Related expenditures included: sales tax $2,050, shipping costs $100, insurance duri

ng shipping $110, installation and testing costs $80, and $100 of oil and lubricants to be used with the machinery during its first year of operations. Whispering Winds estimates that the useful life of the machine is 5 years with a $4,100 salvage value remaining at the end of that time period. Assume that the straight-line method of depreciation is used.
Business
1 answer:
marin [14]3 years ago
8 0

Answer:

Under striaght line the depreciation wil be of 10,548 dollar per year.

Explanation:

the accouting will enter the asset as the sum of all necessary cost to aquire it and leave it ready for use:

price       54,500

taxes         2,050

shipping       100

insurance      110

installation <u>    80     </u>

<em>total </em><em>        56,840‬</em>

depreciation per year:

(cost - salvage value ) / useful life

(56,840 - 4,100) / 5 = 10.548‬

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