Benick Industries purchased a new lathe on January 1, 2014, for $300,000. Benick estimates that the lathe will have a useful life of four years and that the company will be able to sell it at the end of the fourth year for $60,000.

a. Compute the depreciation expense that Benick Industries would record for 2014, 2015, 2016, and 2017 under each of the following methods:

(1) Straight-line depreciation

(2) Double-declining-balance depreciation

b. If you were the president of Benick Industries, what might you consider when choosing a depreciation method for financial reporting purposes? Why?