Question

Blossom Company purchased factory equipment with an invoice price of $81,900. Other costs incurred were freight costs, $1,040; installation wiring and foundation, $2,500; material and labor costs in testing equipment, $800; oil lubricants and supplies to be used with equipment, $680; fire insurance policy covering equipment, $1,710. The equipment is estimated to have a $6,000 salvage value at the end of its 8-year useful service life. Compute the acquisition cost of the equipment. Acquisition cost of the equipment (Round answer to 1 decimal place, e.g. 15.596) If the straight-line method of depreciation was used, the annual rate applied to the depreciable cost would be Click if you would like to Show Work for this amation no

Answer 1

Invoice Price	$81,900
Freight costs	$1,040
Installation wiring and foundation	$2,500
Materials and labor cost in testing	$800
Total Acquisition costs	$86,240
Annual rate =1 / 8 years =12.50%
Annual Depreciation =($86,240 - $6,000) / 8 years =$10,030