The company purchased a machine on April 1 for $100,000. The machine has an estimated useful life

Question:

The company purchased a machine on April 1 for $100,000. The machine has an estimated useful life of five years and an estimated salvage value of $15,000. The company computes partial-year depreciation to the nearest whole month. Compute the amount of depreciation expense for this year and next year using

(1) Sum-of-the years’- digits depreciation and

(2) Double-declining-balance depreciation.

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...