A company purchases equipment costing $21,000, which expects to last 6 years and to have a salvage of $2,000.

For the same equipment, prepare a schedule of depreciation for the first five years using the declining-balance method. Canada Revenue Agency's prescribed rate for depreciation is 20%. Year True Declining Balance Depreciation Balance $21,000 2 3 4 5 Repeat the same type of calculations as above, but this time assume CRA's Half Year rule is in effect. Year Declining Balance With Half Year Rule