Computing Asset Cost and Depreciation Expense Freddy’s Restoration Company decided to purchase a new floor-polishing machine for its shop in New York City. After a long search, it found the appropriate polisher in Chicago.

The machine costs $45,000 and has an estimated 15-year life and no salvage value.

Freddy’s Restoration Company made the following additional expenditures with respect to this purchase:

1. What is the cost of the machine to Freddy’s Restoration Company?
2. What is the amount of the first full year’s depreciation if Freddy’s uses the straight-line method?

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Sales tax $2,000 Delivery costs (FOB shipping point) 1,000 Assembly cost 1,400 Painting of machine to match the dcor 600