Stine Company purchased machinery with a list price of $96000.The company was given a 10% discount by the manufacturer.They paid $600 for shipping and sales tax of $4500.Stine estimates that the machinery will have a useful life of 10 years and a residual value of $30000.If Stine uses straight-line depreciation annual depreciation will be
A)$6150.
B)$6108.
C)$9150.
D)$5640.

Question

Quizplus · Accepted Answer

The cost of the machinery is $96000 - 10% discount = $86400. Adding shipping and sales tax, the total cost is $86400 + $600 + $4500 = $91500. The depreciable amount is $91500 - $30000 (residual value) = $61500. Annual depreciation is $61500 / 10 years = $6150.

Stine Company Purchased Machinery with a List Price of $96000