The RX Drug Company has just purchased a capsulation machine for $76,000. The plant engineer estimates the

Question:

The RX Drug Company has just purchased a capsulation machine for $76,000. The plant engineer estimates the machine has a useful life of 5 years and little or no salvage value. He will use zero salvage value in the computations. Compute the depreciation schedule for the machine using:

(a) Straight-line depreciation.

(b) Sum-of-years'-digits depreciation.

Depreciation
Depreciation is an important concept in accounting. By definition, depreciation is the wear and tear in the value of a noncurrent asset over its useful life. In simple words, depreciation is the cost of operating a noncurrent asset producing... 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...