Question
Need help with b On January 1, 2022, Pronghorn Company purchased the following two machines for use in its production process. Machine A: The cash
Need help with b
On January 1, 2022, Pronghorn Company purchased the following two machines for use in its production process. Machine A: The cash price of this machine was $47,500. Related expenditures also paid in cash included: sales tax $3,550, shipping costs $200, insurance during shipping $50, installation and testing costs $70, and $100 of oil and lubricants to be used with the machinery during its first year of operations. Pronghorn estimates that the useful life of the machine is 5 years with a $5,350 salvage value remaining at the end of that time period. Assume that the straight-line method of depreciation is used.
Machine B: The recorded cost of this machine was $180,000. Pronghorn estimates that the useful life of the machine is 4 years with a $10,000 salvage value remaining at the end of that time period.
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