Calculate the cost of the equipment

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Reference no: EM133443746

Question: Kabale company purchased factory equipment with an invoice price of $70,000. Other costs incurred were freight costs, $1,400; Installation of wiring and foundation, $2,200; material and labour costs in testing equipment, $700; oil lubricants and supplies to be used with equipment, $500; fire insurance policy covering equipment, $1,400. The equipment is estimated to have and $8,000 residual value at the end of its 5 year useful service life.

a) Calculate the cost of the equipment.

b) If the double declining-balance method of amortization were applied, what percentage would be used to depreciate the asset?

Reference no: EM133443746

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