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Posted: May 31st, 2023
Larkin Company purchased factory equipment with an invoice with
Larkin Company purchased factory equipment with an invoice with an invoice price of $50,000. Other cost incurred were freight cost, $1,300; installation wiring and foundation, $2,200; material and labor costs in testing equipment, $700; oil lubricants and supplies to be used with equipment, $500; fire insurance policy covering equipment, $1,400. the equipment is estimated to gave a $5,000 salvage value at the end of its 8-year useful service life.a. compute the acquisition cost of the equipment. clearly identify each element of cost.b. if the straight-line method of depreciation was used, compute the annual rate applied to the depreciable cost.
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