Accounting for Long$-$term Assets

On January $1,$ a company purchased a new machine and incurred the following costs related

to the purchase:

a$.$ List price, $$7000$

b$.$ Sales tax, $$500$

c$.$ Shipping cost, $$800$

d$.$ Costs to assemble the machine, $$500$

e$.$ Cost to repair the machine three months after the asset was put in service.

Determine the cost of the new machine.

Answer:

On August $1,$ Warren Company purchased a machine costing $$12000,$ with a $5-$year life, and

an estimated salvage value of $$2000.$ Calculate the depreciation expense for the first year

using each of the depreciation methods below:

a$.$ Straight line method

Answer:

b$.$ Sum of the year's digits method

Answer:

c$.$ The double declining balance method.

Answer: