9.2 Joseph Smith had just purchased a taxi license. He is seeking advice on how to account for his

business. Joseon has ourchased a car costing S20.000. He esitmates that the car will be used for four

years after which he will sell it for $5,000. Calculate the depreciation charge to the income statement for

each vear using.

a) The straight-line method

b) The reducing balance method using a depreciation rate of 30%