Winters Company purchased a new van to expand its business. The invoice price of the van was $35,400, with additional costs of $950 for dealer prep and $675 in destination charges. Winters also had the dealer install special roof racks at a cost of $1,450 and paid $2,255 in sales tax, $175 in annual registration fees, and $60 for the title. The annual insurance bill totaled $1,960, and Winters opted for an extended warranty package costing $935. Within one month’s time, Winters spent $330 for gasoline.
Determine the dollar amount that Winters should debit the Vehicles account.
Dray Enterprises recently acquired a new machine at a cost of $59,000. The machine has an estimated useful life of six years or 45,000 production hours, and salvage value is estimated at $5,000. During the first two years of the asset’s life, 8,000 and 7,500 production hours, respectively, were logged by the machine.
Calculate the depreciation charge for the first two years of the asset’s life using the (a) straight-line method, (b) units-of-production method, and (c) double-declining-balance method.
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