A company purchased a machine for $100,000 with a useful life of 5 years and a residual value of $10,000. Compare the depreciation expenses using the straight-line method and the double-declining balance method.

Requirements:

(a) Calculate the annual depreciation expense using the straight-line method. (b) Compute the annual depreciation expense using the double-declining balance method. (c) Prepare the depreciation schedule for both methods. (d) Analyze the impact of each method on financial statements.