Using the Straight line method calculate the depreciation in the annual depreciation expenses and following scenario:...
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Using the Straight line method calculate the depreciation in the annual depreciation expenses and following scenario: MLB Co. bought a heavy duty machinery for its production on August 2, 2008 at a price of $200,000 with credit terms of 2/10, n/30. In order to purchase this machinery, MLB has to incur the following additional expenses on the same date: Sale tax of 15% Transportation charges of $5,000; and Installation charges of $8,000.00 It is the company policy to depreciate the machinery over the 10 years. This machine has a scrape value of $10,000. JK closes its accounting year on December 31 each year. Using the Straight line method calculate the depreciation in the annual depreciation expenses and following scenario: MLB Co. bought a heavy duty machinery for its production on August 2, 2008 at a price of $200,000 with credit terms of 2/10, n/30. In order to purchase this machinery, MLB has to incur the following additional expenses on the same date: Sale tax of 15% Transportation charges of $5,000; and Installation charges of $8,000.00 It is the company policy to depreciate the machinery over the 10 years. This machine has a scrape value of $10,000. JK closes its accounting year on December 31 each year.
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First we need to calculate the total cost of the machinery including the purchase price sales tax tr... View the full answer
Related Book For
Financial Accounting and Reporting
ISBN: 978-1292162409
18th edition
Authors: Barry Elliott, Jamie Elliott
Posted Date:
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