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On January 1, 2012, Tiggy Company purchased the following two machines for use in its production process.
Machine A: The cash price of this machine was $38,000. Related expenditures included: sales tax $1,700, shipping costs $150, unsurance during shipping $80, installation and testing costs $70, and $100 of oil and lubricants to be used with the machinery during its first year of operations. Tiggy estimates that the useful life of the machine is 5 years with a $5,000 salvage value remaining at the end of that time period. Assume that the straight-line method of depreciation is used.
Machine B: The recorded cost of this machine was $160,000. Tiggy estimates that the useful life of the is 4 years with a $10,000 salvage value remaining at the end of that time period.
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