In January, Fanning Corporation entered into a contract to acquire a new machine for its factory. The machine, which had a cash price of $400,000, was paid for as follows: Down payment .......................................... $ 30,000 Note payable in 1 . equal monthly installments ......... 240,000 1,000 shares of Hunter common stock with an agreed value of $50 per share
.............................. 50,000 Total ................................................. $320,000 Prior to the machine's use, installation costs of $10,000 were incurred. The machine has an estimated useful life of ten years and an estimated salvage value of $10,000 . What should Hunter record as depreciation expense for the first year under the straight-line method?
a. $38,100
b. $39,100
c. $40,000
d. $41,000
C
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Write a short note on application forms.
What will be an ideal response?
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