(Calculation of depreciation; three methods)

On January 1, 2016, SugarBear Company acquired equipment costing $150,000, which will be depreciated on the assumption that the equipment will be useful for five years and have a residual value of $12,000. The estimated output from this equipment is as follows: 201615,000 units; 201724,000 units; 201830,000 units; 201928,000 units; 202018,000 units. The company is now considering possible methods of depreciation for this asset.

Required

a. Calculate what the depreciation expense would be for each year of the asset's life, if the company chooses:

i.The straight-line method

ii.The units-of-production method

iii.The double-diminishing-balance method

b. Briefly discuss the criteria that a company should consider when selecting a depreciation method.