A machine cost $500,000 on April 1, 2010. Its estimated salvage value is $50,000 and its expected

Question:

A machine cost $500,000 on April 1, 2010. Its estimated salvage value is $50,000 and its expected life is eight years.

Calculate the depreciation expense (to the nearest dollar) by each of the following methods, showing the figures used.

a) Straight-line for 2010

b) Double-declining balance for 2011

c) Sum-of-the-year's-digits for 2011

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...