Week 7 Unit 6 Additional tutorial questions Q1 Sharp Print Shop purchased two new printing machines, A and B, in 1 January 2013. The invoice price of A was $85,000 and B was $141,000. Delivery costs amounted to $10,000 each, and Shape paid $2,000 and $4,000 for a special insurance policy to cover the machines A and B respectively while in transit. Installation cost was $3,000 for A and $5,000 for B. Additionally, Shape hired a new supervisor at an annual salary of $75,000 to be responsible for keeping the machine to operate during business hours. On 3 March 2014, A was written off in fire accident and Sharp received $75,000 from the insurance company. This machine was replaced on 12 March 2014 by machine C which cost $200,000. A full year's depreciation is charged in the year of acquisition and no depreciation charged in the year of disposal. Required: a) What amount should be used as the basis for depreciation of the new assets A and B? b) Calculate the depreciation expense and accumulated depreciation expense for the year 2013 to 2015 of the machines using the straight-line method at a rate of 20% per annum. c) What is the profit or loss of the disposal of machine A