Question goldman corporation purchased a machine on 1st

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Reference no: EM13349478

Question :

Goldman Corporation purchased a machine on 1^st June, 2010, for $55,332, f.o.b. the place of manufacture. Freight to the point where it was set up was $348, and $870 was expended to install it. The machine's useful life was evaluated at 10 years, with a salvage value of $4,350. On June 1, 2011, an necessary part of the machine is replaced, at a cost of $4,698, with one designed to reduce the cost of operating the machine. The cost of the old part and related depreciation cannot be evaluated with any accuracy.

On 1^st June, 2014, the company purchases a new machine of greater capacity for $60,900, delivered, trading in the old machine which has a fair value and trade-in allowance of $34,800. To prepare the old machine for elimination from the plant cost $131, and expenditures to install the new one were $2,610. It is evaluated that the new machine has a useful life of 10 years, with a salvage value of $6,960 at the end of that time. The exchange has commercial substance.

Consider that depreciation is to be evaluated on the straight-line basis, evaluate the annual depreciation on the new equipment that could be provided for the fiscal year beginning 1^st June, 2014.

Depreciation for the year starting 1^st June, 2014

Reference no: EM13349478

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