Samson Manufacturing Company, a calendar year company, purchased a machine for $65,000 on January 1, 2015. At the date of purchase, Samson incurred the following additional costs:           Loss on sale of old machinery $ 1,000   Freight-in   500   Installation cost   2,000   Testing costs prior to regular operation   300       The machine’s estimated salvage value was $5,000, and Samson estimated it would have a useful life of 20 years with depreciation being computed on the straight-line method. In January 2017, accessories costing $3,600 were added to the machine to reduce its operating costs. These accessories neither prolonged the machine’s life nor provided any

FINANCIAL ACCOUNTING
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ISBN:9781259964947
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Chapter1: Financial Statements And Business Decisions
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Samson Manufacturing Company, a calendar year company, purchased a machine for $65,000 on January 1, 2015. At the date of purchase, Samson incurred the following additional costs:

 

       
Loss on sale of old machinery $ 1,000  
Freight-in   500  
Installation cost   2,000  
Testing costs prior to regular operation   300  
 

 

The machine’s estimated salvage value was $5,000, and Samson estimated it would have a useful life of 20 years with depreciation being computed on the straight-line method. In January 2017, accessories costing $3,600 were added to the machine to reduce its operating costs. These accessories neither prolonged the machine’s life nor provided any additional salvage value.

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