Samson Manufacturing Company, a calendar year company, purchased a machine for $65,000 on January 1, 2012. At the date of purchase, Samson incurred the following additional costs:
Loss on sale of old machinery .... $1,000
Freight-in .............. 500
Installation cost ........... 2,000
Testing costs prior to regular operation . 300

The machine’s estimated salvage value was $5,000, and Samson estimated it would have a useful life of 20 years with depreciation being computed on the straight-line method. In January 2014, accessories costing $3,600 were added to the machine to reduce its operating costs. These accessories neither prolonged the machine’s life nor provided any additional salvage value.

What should Samson record as depreciation expense for 2014?

  • CreatedSeptember 10, 2014
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