Tomko Company purchased machinery with a list price of $32,000.They were given a 10% discount by the manufacturer.They paid $200 for shipping and sales tax of $1,500.Tomko estimates that the machinery will have a useful life of 10 years and a residual value of $10,000.If Tomko uses straight-line depreciation, annual depreciation will be

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The cost of the machinery is $32,000 - 10% discount + $200 shipping + $1,500 sales tax = $30,300. Depreciable cost = $30,300 - $10,000 residual value = $20,300. Annual depreciation = $20,300 / 10 years = $2,050.

Tomko Company Purchased Machinery with a List Price of $32,000