Question 4: (10 marks)

ALPHA Company purchased equipment on 1/1/N with an invoice price of $80,000. Purchase taxes $16,000. Other costs incurred were freight costs, $1,100; installation wiring and foundation, $2,200; material and labor costs in testing equipment, $700; fire insurance policy forthe factory is, $1,400. The equipment is estimated to have a $5,000 salvage value at the end of its 5-year useful service life.

Required:

(a)Compute the acquisition cost of the equipment. (2 marks)

(b)If the double-declining-balance method of depreciation was used for the machine, prepare the depreciation schedule for the full period.(5 marks)