Questions:

1. Adopting the Straight Line Depreciation Method, solve the following exercise:

Your company purchases a new equipment for 30,000$ on January 01, 2017, and predicted its useful life to be 5 years, and at the same time predicted its residual value to be equal to 2,500$.

Draw the table for the calculation of the depreciation expense of this equipment, showing, its cost, depreciation expense per year, accumulated depreciation, book value, and the final residual value.

2. Adopting the Double-Declining Balance Method, solve the following exercise:

Your company purchases a new equipment for 30,000$ on January 01, 2017, and predicted its useful life to be 5 years, and at the same time predicted its residual value to be equal to 2,500$.

Draw the table for the calculation of the depreciation expense of this equipment, showing, its cost, depreciation expense per year, accumulated depreciation, book value, and the final residual value.

3. Compare and contrasts between both methods, and the values showing on the tables.