Can anyone help clarify for me why the residual value of $5,000 (what I assume to be the equivalent of salvage value) is not subtracted from $75,000? This seems to go against everything I though I knew about depreciation. Thank you
XYZ Company recently purchased a machine for $75,000. It expects to use the machine for 6 years, after which it will have a residual value of $5,000. How much depreciation should the company charge in the second year using double-declining balance depreciation?