Franklin Company purchased a machine on January 1, 2012, paying $150,000. The machine was estimated to have

Question:

Franklin Company purchased a machine on January 1, 2012, paying $150,000. The machine was estimated to have a useful life of eight years and an estimated salvage value of $30,000. In early 2014, the company elected to change its depreciation method from straight-line to sum-of-the-years'-digits for future periods. What should be the charge for depreciation for 2014?

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...