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PART 4.ARAMCO company purchases factory machine at a cash price of $100,000. Related expenditures are sales taxes $3000, Insurance after the installation is $6000 and

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PART 4.ARAMCO company purchases factory machine at a cash price of $100,000. Related expenditures are sales taxes $3000, Insurance after the installation is $6000 and Installation and testing $1,500. The machine has an estimated useful life of 6 years and salvage value is $2,000. 1. Determine the cost component of the machine. Marking Scheme: .5 mark for every cost component x 4 = 2 Marks 2. Compute the total costs of the machine. Marking Scheme: Correct formula & answer = 2 marks 3. Using straight line method, how much will be the annual depreciation cost? Marking Scheme: Correct formula & answer = 2 marks 4. Compute the book value of the machine at the end of the 4th year? Marking Scheme

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