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Cominsky Company purchased a machine on July 1, 2018, for $28,000. Cominsky paid $200 in title fees and county property tax of $125 on the machine. In addition, Cominsky paid $500 shipping charges for delivery, and $475 was paid to a local contractor to build and wire a platform for the machine on the plant floor. The machine has an estimated useful life of 6 years with a salvage value of $3,000.
Determine the depreciation base of Cominsky’s new machine. Cominsky uses straight-line depreciation.
Depreciation base $
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Answer:

$26,300

Explanation:

Depreciation Base is the total amount charged to expenses over an asset's useful life.

In Straight line method of Depreciation:

Depreciation Base = (Cost of Asset - Salvage Value)

Cost of Asset $28,000 + $200 + $125 + $500 + $475

Cost of Asset = $29,300

Depreciable Base = $29,300 - $3,000

Depreciable Base = $26,300

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