Sherwin company purchased a new machine on Feb 1, 2014 for $110,000. Sherwin also paid $4,000 in shipping/installation costs and $1,000 in sales tax. The machine was estimated to have a life of 4 years and a salvage value of $15,000. the company has adopted a fractional year convention where a full years depreciation is taken if an asset is used for at least half a year and no depreciation is taken in the year that an asset is used for less than half a year. the company has a calendar fiscal year. the machine did end up lasting exactly four years and was sold for the amount of the salvage value.

Objectives:

1. Compute depreciation expense for the years 2014-2019 and the total depreciation under each of the following methods: straight line, sum of years digits, and double declining balance method.

2. Assume the same information, also assume that only the SL method is used. at the beginning of 2015, it is determined that the machine will last longer than initially thought, a total of 5 years instead of 4 years. However the salvage value will remain the same. How much depreciation expense should be recorded in 2015?