On July 1, 2012, Gilmore Ltd. purchased on account, factory equipment with an invoice price of $85,000. Other costs incurred were freight costs, $1,500; installation, wiring and foundation, $13,500; material and labour costs in testing equipment, $500; oil lubricants and supplies to be used while operating the equipment, $750; fire insurance policy covering equipment, $1,400. The equipment is estimated to have a $10,000 residual value at the end of its 8-year useful service life. Round all final calculations to the nearest dollar.

Required:

1. Calculate the cost of the equipment.
2. Record the purchase of the equipment.
3. Record Depreciation for Dec 31, 2020 assuming the straight-line method of depreciation is used. Gilmore Ltd. has a December 31 year end and prepares adjusting entries annually.
4. What would be the total depreciation expense over 8 years useful life if Gilmore uses the declining balance method?

On July 1, 2012, Gilmore Ltd. purchased on account, factory equipment with an invoice price of $85,000. Other costs incurred were freight costs, $1,500; installation, wiring and foundation, $13,500; material and labour costs in testing equipment, $500; oil lubricants and supplies to be used while operating the equipment, $750; fire insurance policy covering equipment, $1,400. The equipment is estimated to have a $10,000 residual value at the end of its 8-year useful service life. Round all final calculations to the nearest dollar. Required: A. Calculate the cost of the equipment. B. Record the purchase of the equipment. C. Record Depreciation for Dec 31, 2020 assuming the straight-line method of depreciation is used. Gilmore Ltd. has a December 31 year end and prepares adjusting entries annually. D. What would be the total depreciation expense over 8 years useful life if Gilmore uses the declining balance method