On January 1, 2022, Martinez Company purchased the following two machines for use in its production process. Machine A Machine B: The cash price of this machine was $54,500. Related expenditures also paid in cash included: sales tax $2,050, shipping costs $100, insurance during shipping $110, installation and testing costs $80, and $100 of oil and lubricants to be used with the machinery during its first year of operations. Martinez estimates that the useful life. the machine is 5 years with a $4,100 salvage value remaining at the end of that time period. Assume that the straight-line method of depreciation is used. The recorded cost of this machine was $180,000. Martinez estimates that the useful life of the machine is 4 years with a $10,000 salvage value remaining at the end of that time period.

On January 1, 2022, Martinez Company purchased the following two machines for use in its production process. Machine A Machine B: The cash price of this machine was $54,500. Related expenditures also paid in cash included: sales tax $2,050, shipping costs $100, insurance during shipping $110, installation and testing costs $80, and $100 of oil and lubricants to be used with the machinery during its first year of operations. Martinez estimates that the useful life. the machine is 5 years with a $4,100 salvage value remaining at the end of that time period. Assume that the straight-line method of depreciation is used. The recorded cost of this machine was $180,000. Martinez estimates that the useful life of the machine is 4 years with a $10,000 salvage value remaining at the end of that time period.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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