Begonia Company purchased a new machinery to use in its manufacturing activities as of March 1, 2019 for $ 500,000. Paid $30,000 for its transportation; $40,000 for its installation and $60,000 for its transportation insurance.

It took 2 months for the company to get the machinery eligiable for use and spent extra $60,000 during this period and started to use the machinery as of May 1, 2019.

Company estimated the useful life of the machinery as 10 years and salvage value as $40,000 and decided to use straight line method of depreciation.

Required:

a) What is the cost of the new machinery for the company?

b) What is the net book value of the machinery as of December 31, 2020?