On April Judy purchased a motor car at a cost of $ to use in business. The

estimated useful life of the car is years, with an estimated residual value at the end of

the period of $ Judy is considering two depreciation methods that could be used in

depreciating the motor car for accounting purposes. The first method is the straightline

depreciation method, and the second method is the diminishing balance method using a

per annum rate. Assume the company applies a full months depreciation in the

month of purchase.

Required

Which method would result in the higher reported profit for the year ending March

and for the year ending March Provide reasons for your answer.

To answer this question, you need to prepare separate depreciation schedules for the

vehicle for years using the straightline method and the diminishing balance method.

Round figures to the nearest dollar. Use the templates provided in the Excel sheet.