Question
On August 3, Cinco Construction purchased special-purpose equipment at a cost of $7,396,000. The useful life of the equipment was estimated to be eight years,
On August 3, Cinco Construction purchased special-purpose equipment at a cost of $7,396,000. The useful life of the equipment was estimated to be eight years, with an estimated residual value of $79,740.
a. Compute the depreciation expense to be recognized each calendar year for financial reporting purposes under the straight-line depreciation method (half-year convention). **1 through 9 in years and need the strait-line (half year convention) and the total.**
b. Compute the depreciation expense to be recognized each calendar year for financial reporting purposes under the 200 percent declining-balance method (half-year convention) with a switch to straight-line when it will maximize depreciation expense. **1 through 9 in years and need the 200% declining balance (half year convention) and the total.**
c. Which of these two depreciation methods (straight-line or double-declining-balance) results in the highest net income for financial reporting purposes during the first two years of the equipments use? **need "depreciation method which results in the highest net income for the first two years is: ______"**
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