Problem #6 Health Guard Labs, a pharmaceutical company, recently purchased a new pill dispensing machine. The purchase price was $24,500, the estimated residual value was $10,000, and the estimated useful life is five years. Additional expenditures during the first year of use were as follows:

Sales tax

Assembly

Maintenance repairs Replacement parts New battery to increase energy efficiency

$750 $450 $2,500 $3,600 $670

Instructions: 1. Determine the machine asset value at year end of year one. 2. Create a depreciation schedule for year one and two for the dispensing machine by using the straight line method. 3. Create a depreciation schedule for year one and two for the dispensing machine by using the double declining method.