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Determine the capitalized cost of the new machine

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Reference no: EM132843623

Mulligan Co. purchased a new machine on January 1. The following information pertains to the purchase:

Life of asset 5 years

Salvage value $4,500

Purchase price 27,000

Sales tax 1,500

Freight cost 1,200

Electrical set-up 1,050

Custom programming 750

Estimated annual labor savings 5,250

Additional revenue generated 12,000

Problem a. Determine the capitalized cost of the new machine

Problem b. Compute annual depreciation, accumulated depreciation and the machine's book value for the first three year assuming:

i. Straight-line depreciation

ii. Double-declining-balance method

Reference no: EM132843623

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