Machinery was purchased for $400000. Freight charges amounted to $15000 and there was a cost of $34000 for building a foundation and installing the machinery. It is estimated that the machinery will have a $50000 salvage value at the end of its 4-year useful life. Depreciation expense each year using the straight-line method will be $99750. $87750. $112250. $87500.

Machinery was purchased for $400000. Freight charges amounted to $15000 and there was a cost of $34000 for building a foundation and installing the machinery. It is estimated that the machinery will have a $50000 salvage value at the end of its 4-year useful life. Depreciation expense each year using the straight-line method will be $99750. $87750. $112250. $87500.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Machinery was purchased for $400000. Freight charges amounted to $15000 and there was a cost of $34000 for building a
foundation and installing the machinery. It is estimated that the machinery will have a $50000 salvage value at the end of its 4-year
useful life. Depreciation expense each year using the straight-line method will be
$99750.
$87750.
$112250.
Ⓒ$87500.

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Step 1: Capitalized cost of assets

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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation

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