The first audit of the books of Ayayai Company was made for the year ended December 31, 2021. In examining the books, the auditor found that certain items had been overlooked or incorrectly handled in the last 3 years. These items are: 1. At the beginning of 2019 , the company purchased a machine for $558,000 (salvage value of $55,800 ) that had a useful life of 6 years. The bookkeeper used straight-line depreciation but failed to deduct the salvage value in computing the depreciation base for the 3 years. No. Account Titles and Explanation 1. Accumulated Depreciation-Machinery 27900 Depreciation Expense 18600 Retained Earnings 9300