# Health Guard Labs, a pharmaceutical company, recently purchased a new pill dispensing machine. The purchase price was \$24,500, the estimated residual value was \$10,000, and the estimated useful life is five years. Additional expenditures during the first year of use were as follows: 1. Sales tax \$750 2. Assembly \$450 3. Maintenance repairs \$2,500 4. Replacement parts \$3,600 5. New battery to increase energy efficiency \$670 Instructions: 1. Determine the machine asset value at year end of year one. 2. Create a depreciation schedule for year one and two for the dispensing machine by using the straight line method. 3. Create a depreciation schedule for year one and two for the dispensing machine by using the double declining method.

Question

Problem #2
Health Guard Labs, a pharmaceutical company, recently purchased a new pill dispensing machine. The
purchase price was \$24,500, the estimated residual value was \$10,000, and the estimated useful life is
five years. Additional expenditures during the first year of use were as follows:
1. Sales tax \$750
2. Assembly \$450
3. Maintenance repairs \$2,500
4. Replacement parts \$3,600
5. New battery to increase energy efficiency \$670
Instructions:
1. Determine the machine asset value at year end of year one.
2. Create a depreciation schedule for year one and two for the dispensing machine by using
the straight line method.
3. Create a depreciation schedule for year one and two for the dispensing machine by using the double declining method.