Cost = $335,885

Salvage value = $80,000

Useful life of the machine = 5 years

Depreciation = ( Cost - Salvage value } / Useful life

= { 335,885 - 80,000 } / 5

= 255,885 / 5

= $ 51,177

So depreciation expense is $ 51,177 for 5 years.

Now lets see what happens on the balanced sheet,

For 1 year = 335,885 - 51,177 = $284,708

For 2 year = 284,708 - 51,177 = $233,531

Thus the closing balance for year 2 is $233,531