Question

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.

Required:
What should Samson record as depreciation expense for 2014?



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  • CreatedSeptember 10, 2014
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