ACCT2110 Financial Accounting Group Test 3 Problem 1. Larken Company purchased factory equipment with an invoice price of $50,000. Other costs incurred were freight costs, $1,300; installation wiring and foundation, $2,200; material and labor costs in testing equipment, $700; oil lubricants and supplies to be used with equipment, $500; fire insurance policy covering equipment, $1,400. The equipment is estimated to have a $5,000 salvage value at the end of its 8- year useful service life. Instructions (a) Compute the acquisition cost of the equipment. Clearly identify each element of cost. (b) If the straight-line method of depreciation was used, compute the annual rate applied to the depreciable cost. (c) Prepare the entries to record the acquisition of the equipment and the depreciation at the end of the first year