Messer Company purchased equipment for $24,000. The company is considering whether to determine annual depreciation using the straight-line method or the declining-balance method at 150 percent of the straight-line rate. Messer expects to use the equipment for 10 years, at the end of which it will have an estimated salvage value of $4,000.

Brief Exercise 9.3 Straight-Line and Declining-Balance Depreciation (LOB-3) Messer Company purchased equipment for $24,000. The company is considering whether to determine annual depreciation using the straightline method or the decliningbalance method at 150 percent of the straightline rate. Messer expects to use the equipment for 10 years, at the end of which it will have an estimated salvage value of $4,000. Prepare a comparison of these two alternatives for the rst two years Messer will own the equipment Straightline depreciation 150% decliningbalance depreciation