Ivanhoe Enterprises purchased equipment on March 15, 2021, for $71,260. The company also paid the following amounts:
Question:
Ivanhoe Enterprises purchased equipment on March 15, 2021, for $71,260. The company also paid the following amounts: $550 for freight charges; $201 for insurance while the equipment was in transit; $1,939 for a one-year insurance policy; $2,116 to train employees to use the new equipment; and $3,029 for testing and installation. The company began to use the equipment on April 1.
Ivanhoe has estimated the equipment will have a 10-year useful life with no residual value. It expects to consume the equipment’s future economic benefits evenly over the useful life. The company has a December 31 year end.
Calculate the cost of the equipment.
Cost of the equipment | $enter cost of the equipment in dollars |
Which depreciation method should the company use?
Select a method Units-of-production method Diminishing-balance method Straight-line method
Financial Accounting Tools for Business Decision Making
ISBN: 978-1118644942
6th Canadian edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine