3) Slow-N-Steady Company and Jackrabbit Company are two firms that are similar in many ways, except that Slow-N-Steady uses the straight-line method for its depreciable assets, whereas Jackrabbit uses the declining balance method at double the straight-line rate. On January 1 of Year 1, each firm acquired the following similar, depreciable assets: Asset Building Equipment Cost $320,000 $110,000 Salvage Value $20,000 $10,000 Useful Life 40 years 10 years Annual net income for the firms (including the appropriate depreciation charges) in Years 1-3 were: Slow-N-Steady Jackrabbit Year 1 $84,000 $68,000 Year 2 $88,400 $76,000 Year 3 $90,000 Total $85,000 $262,400 $229,000 On December 31 of Year 3, the balance sheets for the two firms are similar, except that Jackrabbit has more cash than Slow-N-Steady. Your client, Anita Chance, is interested in becoming a major shareholder in one of these two firms, and she has come to you for advice. a) Determine the annual depreciation recorded by each company in Years 1-3, as well as the total depreciation for each firm over the three years. Depreciation Year 1 Year 2 Year 3 Total Slow-N-Steady Jackrabbit Computations: b) Assuming that Jackrabbit Company had also used the straight-line method for depreciation, instead of the declining balance method, recalculate its net income for each year and its total net income over the three years. Jackrabbit Declining-balance Net Income Straight-line Depreciation Straight-line Net Income Computations: Year 1 $68,000 Year 2 $76,000 Year 3 $85,000 Total $229,000