Horngrens Company purchased a piece of equipment last year for $250,000, with a useful life of five years and no salvage value. The company uses the straight-line method of depreciation for reporting purposes. The depreciation expense recorded for tax purposes will be $65,000 in Year 2.

a. Calculate the amount of depreciation expense for reporting purposes for Year 2. Show your work.

b. Calculate the book value of the equipment at the end of Year 2. Show your work.