Plant asset account, What is the amount that is to be

Plant asset account

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Reference no: EM13762491

On January 3, Pedroia Corporation purchased a new machine from ABC Harvestor for $75,000. In addition, the cost to ship the machine to the Pedroia plant was $500; Pedroia Corp. insured the machine while it was in transit at a cost of $600; Pedroia Corporation paid $2,500 to repair the machine for damage caused by vandalism while in storage before installation; ABC Harvestor sent two of its men to Pedroia Corp. to help with the installation of the machine and charged Pedroia Corp. $3,200. Pedroia Corp. paid $1,500 for initial training of employees to be able run the machine. Pedroia Corp. paid $500 to repair the machine after it was in operation. It is estimated that the machine will have a useful life of 5 years and a salvage value of $2,500.

a. What is the amount that is to be debited to the plant asset account?

b. What is the depreciation expense for the first three years using the double-declining balance method?

Reference no: EM13762491

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