Dorothys Design is a relatively new landscaping business. This year (2022) has been very profitable, so Dorothy purchased a new tractor, implements, trailer and truck for her business. The details of her purchase are below.

Dorothy has asked you for your ideas about depreciation. She would like to know what her options are for depreciating these items for 2022. Dorothy also mentioned that although this year has been very profitable, she is worried that the economy is heading into a recession and thinks that the next few years she may have trouble turning a profit. Given this scenario she would like to know:

What are her options for depreciating these items?

What would the depreciation amounts be for each item for each option for the next 5 years?

What are the advantages and disadvantages of each option?

What is your recommendation and why?

Asset	Date of Purchase	Cost	Useful life	Salvage Value
Tractor	3/31/2022	50,000	10 years	0
Implements	4/2/2022	26,000	5 years	1,000
Trailer	7/1/2022	30,000	15 years	0
Truck*	7/1/2022	60,000	5 years	5,000

*Dorothy estimates that the truck will be driven 100,000 miles over the 5-year life. For year 1 the truck will be driven 7,000 miles. Years 2-4 the truck will be driven 20,000 miles and year 5 the truck will be driven 33,000 miles.