Newell Company purchased a machine with a list price of $160000.The company was given a 10% discount by the manufacturer and paid $1000 for shipping and sales tax of $7500.Newell estimates that the machine will have a useful life of 10 years and a salvage value of $50000.If Newell uses straight-line depreciation annual depreciation will be
A)$10250.
B)$10180.
C)$15250.
D)$9400.

Question

Quizplus · Accepted Answer

The cost of the machine is $160,000 - 10% discount = $144,000. Adding shipping and sales tax, the total cost is $144,000 + $1,000 + $7,500 = $152,500. The depreciable amount is $152,500 - $50,000 (salvage value) = $102,500. Dividing by 10 years, the annual depreciation is $10,250.

Newell Company Purchased a Machine with a List Price of $160000.The