Case 7-1: Use the information below to answer Questions 1 – 4. 

A business purchased a machine that had a total cost of $220,000 and a residual value of $20,000. The asset is expected to service the business for a period of 10 years or produce a total of 1,000,000 units. The machine was purchased January 1st of the current year and has been in service one complete year. 

Refer to Case 7-1. What is the depreciable cost of the asset?