Question:
(Financial statement classification) Wayside Machine Tool Company purchased a $600,000 welding machine to use in production of large machine tools and robots. The welding machine was expected to have a life of 10 years and a salvage value at time of disposition of $60,000. The company uses straight-line depreciation. During its first operating year, the machine produced 600 machines of which 480 were sold.
a. What part of the $600,000 machine cost expired?
b. Where would each of the amounts related to this machine appear on the financial statements at the end of the first year of operations?