Samson Manufacturing Company, a calendar year company, purchased a machine for $65,000 on January 1, 2012. At

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 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 .

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

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...