Problem
At the start of year 1, Smitty, Inc. acquired two machines for use in its operations. Machine A cost $27,000, has an expected salvage value of $3,000, and is expected to last 6 years. Machine B cost $64,000, has an expected salvage of $8,000, and an estimated useful life of 8 years. Smitty decides to depreciate Machine A using straight-line depreciation, and Machine B using the double-declining balance method. Compute depreciation expense for both machines for the first two years the are in use.