Problem 4 At the beginning of the year, Ramos Inc. bought three used machines from Santaro Corporation. The machines immediately were overhauled, installed and started operating. The machines were different; therefore, each had to be recorded separately in the accounts. Invoice price of the asset Installation Costs Renovation costs prior to use Machine A $12,200 1,600 600 Machine B $32,500 1,100 1,400 Machine C $21,700 1,100 1,600 By the end of the first year, each machine had been operating 7,000 hours. Required: 1. Compute the cost of each machine 2. Give the entry to record depreciation expense at the end of Year 1 (with separate accumulated depreciation accounts for each machine), assuming the following: Machine B ESTIMATES Life Residual Value 8 years $1,000 33,000 Hours 2,000 1,400 Depreciation Method Straight-line Units-of-production Double-declining balance 5 years