On August 3, Cinco Construction purchased special-purpose equipment at a cost of $5,985,300. The useful life of the equipment was estimated to be eight years, with an estimated residual value of $94,360.

a. Compute the depreciation expense to be recognized each calendar year for financial reporting purposes under the straight-line depreciation method (half-year convention).

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.

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?

Required A Required B Required C Compute the depreciation expense to be recog declining-balance method (half-year convention (Adjust year 9 depreciation, if necessary, so th round intermediate calculations and round your Year 200% Declining- Balance (Half- Year Convention) Totals