Instructions Redo the Double Declining Balance exhibit 6.4 from the powerpoint so that the rent revenue is a consistent $8,000 each year. Update the Income Statement and Balance Sheet to show the effects of the update. Then, think about how DDB depreciation impacts a business differently than SL depreciation (shown in exhibit 6.3.) s.euu ulecullen 2 10 904 VIEWLULUJUUSIJJJ) VIEWIUU-2 IU) 304 EXHIBIT 6.4 Financial Statements under Double-Declining-Balance Depreciation DRYDEN ENTERPRISES Financial Statements Year 1 Year 2 Year 3 Year 4 Income Statements Rent revenue Depreciation expense Net income $15,000 (12,000 $ 3,000 $ 9,000 (6,000) $ 3,000 $ 5.000 (2.000) $ 3,000 $ 3,000 0 $ 3,000 Balance Sheets Assets Cash Van Accumulated depreciation Total assets Stockholders' equity Common stock Retained earnings Total stockholders' equity $16,000 24,000 (12,000 $28,000 $25,000 * 24.000 (18,000) $31.000 $30,000 24.000 (20,000) $34,000 $33,000 24,000 (20,000 $37.000 $25,000 3,000 $28,000 $25,000 6,000 $31,000 $25,000 9,000 $34,000 $25,000 12.000 $37,000 Financial Statements Under Straight-Line Depreciation EXHIBIT 6.3 Financial Statements under Straight-Line Depreciation DRYDEN ENTERPRISES Financial Statements Year 3 Year 4 Year 1 Year 2 Statements of Cash Flows $ 8,000 $ 8,000 $ 8,000 $ 8,000 (24,000) Operating Activities Inflow from customers Investing Activities Outflow to purchase van Financing Activities Inflow from stock issue Net Change in Cash Beginning cash balance Ending cash balance 25,000 9,000 0 $ 9,000 8,000 9,000 $17,000 8.000 17,000 $25,000 8,000 25,000 $33,000