Question 38:
Alladin Company purchased Machine #201 on May 1, 2012. The subsequent information relating to Machine #201 was gathered at the end of May.
Price $164,050
Credit terms 2/10, n/30
Freight-in costs $1,544
Preparation and installation costs $7,334
Labor costs during regular production operations $20,265
It was expected that the machine would be used for 10 years, after which the salvage value could be zero. Alladin intends to use the machine for only 8 years, thus, after which it expects to be able to sell it for $2,895. The invoice for Machine #201 was paid May 5, 2012. Alladin uses the calendar year as the basis for the preparation of financial statements.