Assume that an organization purchased two pieces of equipment on April 1st (the first day of its fiscal year), as follows:

One laboratory equipment that cost $400,000 and has an expected life of 5 years. The salvage value is 5 percent of the cost. No equipment was traded in on this purchase.

One radiology equipment that cost $900,000 and has an expected life of 7 years. The salvage value is 10 percent of the cost. No equipment was traded in on this purchase.

Required:

1. For each piece of equipment compute the straight-line depreciation for:

a) The lab equipment

b) The radiology equipment

2. Compute the double declining balance depreciation for:

a) The lab equipment

b) The radiology equipment