Cutter Enterprises purchased equipment for $90,000 on January 1, 2016. The equipment is expected to have a five-year life and a residual value of $4,200.

Using the sum-of-the-years'-digits method, depreciation for 2017 and book value at December 31, 2017, would be (Do not round depreciation rate per year):

Multiple Choice

• $24,000 and $31,800.

• $24,000 and $36,000.

• $22,880 and $38,520.

• $22,880 and $34,320.

Cutter Enterprises purchased equipment for $84,000 on January 1, 2016. The equipment is expected to have a five-year life and a residual value of $7,800.

Using the double-declining balance method, depreciation for 2016 and the book value at December 31, 2016, would be:

Multiple Choice

• $30,480 and $53,520.

• $33,600 and $42,600.

• $33,600 and $50,400.

• $30,480 and $45,720.