Hinshaw Company purchased a new machine on October 1, 2014, at a cost of $85,500. The company estimated that the machine has a salvage value of $6,600.

On March 1, 2014, Zobrist Company acquired real estate, on which it planned to construct a small office building, by paying $86,080 in cash. An old warehouse on the property was demolished at a cost of $8,350; the salvaged materials were sold for $1,870. Additional expenditures before construction began included $1,680 attorney’s fee for work concerning the land purchase, $5,640 real estate broker’s fee, $8,520 architect’s fee, and $14,640 to put in driveways and a parking lot.

(a) Determine the amount to be reported as the cost of the land.

Cost of land

$

Hinshaw Company purchased a new machine on October 1, 2014, at a cost of $85,500. The company estimated that the machine has a salvage value of $6,600. The machine is expected to be used for 71,600 working hours during its 6-year life.

Compute the depreciation expense under the straight-line method for 2014 and 2015, assuming a December 31 year-end. (Round answers to 0 decimal places, e.g. 125.)

		2014		2015
The depreciation expense under the straight-line method		$		$