Homework Answers
Cost of asset includes
Purchase price of machinery
Non refundable taxes
Installation, trail run cost, testing charges etc..,
Cost of machinery
=$900000+$30000+($900000×20%) +$20000+$15000+$10000+$20000
= $1175000
Depreciation for the year
(Cost of asset - salvage value) ÷ useful life
( $1175000 - $10000) ÷ 5years
= $ 233000 For 1 year but asset purchased on may 1st
Depreciation for 8 months = $155333.34
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