On June 1, 2014, the company buys a new machine of greater capacity for $49,000, delivered, trading in the old machine which has a fair value and trade-in allowance of $28,000. To prepare the old machine for removal from the plant cost $105, and expenditures to install the new one were $2,100. It is estimated that the new machine has a useful life of 10 years, with a salvage value of $5,600 at the end of that time. The exchange has commercial substance.
Assuming that depreciation is to be computed on the straight-line basis, compute the annual depreciation on the new equipment that should be provided for the fiscal year beginning June 1, 2014. (Round answer to 0 decimal places, e.g. $45,892.)
Depreciation for the year beginning June 1, 2014