Depreciation by Two Methods A Caterpillar tractor acquired on January 12 at a cost of $288,000 has an estimated useful life of 25 years. Assuming that it will have no residual value. a. Determine the depreciation for each of the first two years by the straight-line method. Round your answer to the nearest cent if rounding is required. Depreciation First year 11,520 Second year 11,520 b. Determine the depreciation for each of the first two years by the double-declining-balance method. Round your answer to the nearest cent rounding is required. Depreciation First year 23,040 Second year 21,196 X Feedback Check My Work a. Asset cost minus residual value equals depreciable cost. Divide depreciable cost by estimated useful life. b. Straight line rate = 1 divided by the number of useful years. The straight line rate multiplied by 2 equals the double declining rate. Multiply the double rate by the book value to get first year depreciation. Book value is the asset cost minus the accumulated depreciation. In the first year, the balance in the accumulated depreciation account is zero. Calculate the second year's depreciation by taking the second year's remaining book value (after subtracting first year depreciation) times twice the straight line rate. Note that residual value is not considered using the double declining balance method