On January 1 of the current year, Minguss Manufactur-ing Company purchased a metal cutting and polishing machine at a cost of $ 4,000,000. The installation and delivery costs amounted to $ 250,000. The firm expects the machine to be productive for a total of five years and expects a residual value of $ 500,000 at the end of the asset’s useful life.
Required
Prepare the depreciation schedules for the machine assuming that the following methods were used (each case is independent):
1. Straight- line method
2. Double- declining balance method (DDB) ( Reduce the depreciation expense in the last year to the necessary amount to arrive at an ending book value equal to the scrap value.)