Question

Whispering Company purchased a machine on July 1, 2021, for $31,080. Whispering paid $222 in title fees and county property tax of $139 on the machine. In addition, Whispering paid $555 shipping charges for delivery, and $527 was paid to a local contractor to build and wire a platform for the machine on the plant floor. The machine has an estimated useful life of 6 years with a salvage value of $3,330. Determine the depreciation base of Whispering's new machine. Whispering uses straight-line depreciation. Depreciation bases

Answer 1

Depreciation Base = (Cost of Machine - Salvage value)

Cost of Machine = $ 31,080 + 222 + 139 + 555 + 527 = $ 32,523

Therefore, Depreciation Base = ($ 32,523 - 3,330) = $ 29,193