Question
Computing Acquisition Cost and Recording Depreciation under Three Alternative Methods At the beginning of the year, Young Company bought three used machines from Vince, Inc.
Computing Acquisition Cost and Recording Depreciation under Three Alternative Methods
At the beginning of the year, Young Company bought three used machines from Vince, Inc. The machines immediately were overhauled, were installed, and started operating. Because the machines were different, each was recorded separately in the accounts.
Machine A | Machine B | Machine C | |||||||
Amount paid for asset | $ | 8,450 | $ | 27,300 | $ | 11,000 | |||
Installation costs | 450 | 850 | 750 | ||||||
Renovation costs prior to use | 3,200 | 1,600 | 1,150 | ||||||
Repairs after production began | 570 | 520 | 750 |
By the end of the first year, each machine had been operating 5,000 hours.
1. | Compute the cost of each machine.
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