ABUS 321 Homework #7 (3 Questions-25 points Due: November 6, 2019 at the beginning of class Name: The next two problems provide a closer look at Straight Line versus Double Declining Balance Depreciation. In these problems, assume all machinery is bought at the first of the year. Machine Cost Salvage Value Useful Life 1) Tractor A 50,000 20,000 2) Tractor B 60,000 3) Combine 84,000 0 Question: STRAIGHT LINE DEPRECIATION Assume you own the machinery above. Calculate annual depreciation using the straight-line method. (Show work) Question 2: DOUBLE DECLINING BALANCE Now Calculate annual depreciation on this machinery using double declining balance. Be careful not to exceed the salvage value. If the salvage value is zero, switch to straight-line in the year when straight-line yields higher depreciation. (Use the remaining value as the starting point when you change.) Tractor A Tractor B Combine Book Value Depreciation Book Value Depreciation Book value Depreciation Year! Year 2 Year 3 Year 4 Year 5 Year 6 L XL X XL X1 Year 71 XL XL XIX