Carla Vista Co. purchased a machine with a list price of $144000. They were given a 5% discount by the manufacturer. They paid $1000 for shipping and sales tax of $4000. Carla Vista estimates that the machine will have a useful life of 10 years and a salvage value of $60000. If Carla Vista uses straight-line depreciation, annual depreciation will be _________.

Answer:Annual depreciation will be $ 8180Step-by-step explanation:To calculate the annual depreciation, we use the following formula:annual depreciation = depreciable rate x depreciable asset costwhere depreciable asset cost = purchased cost - estimated salvage valuedepreciable rate = 1 : lifespanin the question given, we knowmachine price list = $144000discount = 5% * $144000 = $7200shipping fee = $1000sales tax =  $4000thus, purchased cost = price list - discount + shipping fee + sales tax                                  = $144000 - $7200 + $1000 + $4000                                  = $141800based on the information given in the question,estimated salvage value = $60000So,depreciable asset cost = $141800 - $60000                                     = $81800next, calculate depreciable ratethe lifespan of the machine is 10 years. thereforedepreciable rate = 1 : 10                           = 0.1Now. we can determine the annual depreciation, as belowannual depreciation = $81800 x 0.1                                 = $8180