Depreciation calculation under straight line and declining-balance methods.
Millco Inc acquired a machine that cost 240,000 early in 2009. The machine is expected to last for 8 yrs, and its estimated salvage value at the end of its life is 24,000.
a) Using straight line depreciation, calculate the depreciation expense to be recognized in the 1st yr of the machine's life and calculate the accumulated depreciation after the 5th yr of the machine's life.
b) Using declining-balance depreciation at twice the straight-line rate, calculate the depreciation expense for the 3rd year of the machine's life.
c) What will be the net book value of the machine at the end of its 8th yr of use before it is disposed of, under each depreciation method?