Cathy Ltd purchased a machine on 1 September 2019 for $35,000. Transport and installation costs of $5,000 were also paid. During installation some drainage pipes were damaged and had to be repaired before the machine could be installed, the company paying $4,000.

The useful life of the machine was estimated to be 10 years with no residual value. Cathy Ltd depreciates machines using the straight line method and rounds calculations to the nearest dollar. The reporting period ends 30 June.

On 30 June 2020, Cathy Ltd should recognise how much for depreciation expense on the machine?

Select one:

a.

$3,667

b.

$4,000

c.

$4,400

d.

$3,333