On January 2,2008. the Hines Food Processing company purchased a machine that dispenses a premeasured amount of

Question:

On January 2,2008. the Hines Food Processing company purchased a machine that dispenses a premeasured amount of tomato juice into a can. The machine Cost $85, 000, and its useful life was estimated it eight years. with a of $4,000. At the time it purchased the machine. Hines incurred the following additional expenses:
Freight-in..................................................... $800
Installation cost.............................................. 2.500
Testing costs prior to regular operation...................1.200
Book depreciation was calculated by the straight-line method, but for tax purposes, the machine was classified as a seven-year MACRS property. In January 2010. Accessories costing $5,000 were to the machine to reduce its operating costs. These accessories neither prolonged the machine's life nor provided any additional .
(a) Calculate the book depreciation expense for 2011.
(b) Calculate the tax depreciation expense for 2011. 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...