April 1, 20x7 a pressing machine was sold for $71,000. It originally cost $185,000 and had a book value on December 31, 20x6 of $72,500. The annual depreciation for this machine was $18,000. The machine was expected to have a $5,000 salvage value in about four years.
To celebrate April 15, 20x7, the company acquired a new utility van, which would be used to pick up and deliver parts to customers and suppliers in the immediate vicinity. The van has a sticker price of $37,595, but the company was able to secure the vehicle for $35,000. The van will probably have a useful life of 5 years with a book value of $5,000 at the end of that time. The company paid $7,000 and signed a 3 year note for the balance due.