Question
Sunland Limited purchased a machine on account on April 1, 2021, at an invoice price of $337,200. On April 2, it paid $2,020 for delivery
Sunland Limited purchased a machine on account on April 1, 2021, at an invoice price of $337,200. On April 2, it paid $2,020 for delivery of the machine. A one-year, $4,190 insurance policy on the machine was purchased on April 5. On April 19, Sunland paid $7,530 for installation and testing of the machine. The machine was ready for use on April 30. Sunland estimates the machines useful life will be five years or 6,295 units with a residual value of $84,640. Assume the machine produces the following numbers of units each year: 1,001 units in 2021; 1,379 units in 2022; 1,477 units in 2023; 1,415 units in 2024; and 1,023 units in 2025. Sunland has a December 31 year end.
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