Tabesh Corporation purchased machinery on January 1, 2007, at a cost of

$210,000. The estimated useful life of the machinery is 4 years, with an estimated residual value at the end of that period of $10,000. The company is considering different depreciation methods that could be used for financial reporting purposes.

Instructions

(a) Prepare separate depreciation schedules for the machinery using the straight-line method, and the declining-balance method using double the straight-line rate. Round to the nearest dollar.

(b) Which method would result in the higher reported 2007 income? In the highest total reported income over the 4-year period?

(c) Which method would result in the lower reported 2007 income? In the lowest total reported income over the 4-year period?