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# First two years depreciation

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For this one I used a cost of 550+8+2 and I got stuck there, what is salvage value?

Lite Co. purchased a new machine on January 2, 2007 for \$550,000. The company paid freight on the machine of \$8,000 and incurred \$2,000 in setting up the machine. The machine had a useful life of 5 years and a salvage value of \$10,000. Determine the first two years depreciation per year under:
a) the straight -line method
b) the double declining balance method (show all calculations)

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#### Solution Preview

The salvage value is given as 10,000. The installed cost of the machine is 550,000+8,000+2,000 = 560,000.
a) straight line method
the depreciable value is ...

#### Solution Summary

The solution explains how to calculate the first two years depreciation under straight line method and double declining balance method

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