Part 1

1. Cutter Enterprises purchased equipment for $102,000 on January 1, 2018. The equipment is expected to have a five-year life and a residual value of $7200. Using the double-declining balance method, the book value at December 31, 2019, would be:

   		$36,720.
   		$20,400.
   		$35,820.
   		$37,920.
   		None of the above.

Part 2

1. Cutter Enterprises purchased equipment for $96,000 on January 1, 2018. The equipment is expected to have a five-year life and a residual value of $7,800. Using the straight-line method, depreciation for 2018 would be:

   		$17,640.
   		$96,000.
   		$19,200.
   		None of these answer choices are correct.