On January 2, Lem Corp. bought machinery under a contract that required a down payment of $10,000, plus 24 monthly payments of $5,000 each, for total cash payments of $130,000. The cash equivalent price of the machinery was $110,000. The machinery has an estimated useful life of 10 years and estimated salvage value of $5,000. Lem uses straight-line depreciation. 

In its income statement for the year, what amount should Lem report as depreciation for this machinery?

Answer rating: 100% (QA)

The cost of the machinery can be calculated by adding the down payment a... View the full answer