(solution) Maximum Renovation Company decided to purchase a new carpet cutt

(solution) Maximum Renovation Company decided to purchase a new carpet cutt

Maximum Renovation Company decided to purchase a new carpet cutting machine for its shop in Los Angeles. After a long search, it found the appropriate machine in Chicago. The machine costs $32,000 and has an estimated 16-year life and no salvage value. Maximum made the following additional expenditures with respect to this purchase: Sales tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,400 Delivery costs (FOB shipping point) . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200 Assembly cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 900 Painting of machine to match the dA?cor . . . . . . . . . . . . . . . . . . . . . . . . 500 1. What is the cost of the machine to Maximum? 2. What is the amount of the first full year’s depreciation if Maximum uses the straight-line method?