Question

Is my Acquisition cost of the equipment right? and idk to fund the dpereciable costs at the end expressed as a %.

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 $ 87850 (Round answer to 1 tdecimal place, e.g. 15.5%) 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 question: Qpen Show Work

Answer 1

Amount $ Acquisition cost of equipment- Particulars Invoice price of the Equipment Freight cost incurred Installation wiring and foundation Material and labor cost in testing Total cost of equipment 81,900 1,040 2,500 800 86,240 Oil and lubricants are like regular Straight line method depreciation expense is = (Cost - Salvage value)/Life Straight line method depreciation expense is - (86240-6000)/8 Straight line method depreciation expense is = $ 10,030/. Annual rate applied is = 100%/8 = 12.50%