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The 2011 annual report of Alaska Airlines contained the following footnote: PROPERTY, EQUIPMENT, AND DEPRECIATION Property and equipment are recorded at cost and depreciated using

The 2011 annual report of Alaska Airlines contained the following footnote:

PROPERTY, EQUIPMENT, AND DEPRECIATION Property and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives, which are as follows:

Aircraft and related flight equipment 15-20 years

Buildings 25-30 years

Capitalized leases & leasehold improvements Shorter of lease term or estimated useful life

Minor building and land improvements 10 years

Computer hardware and software 3-5 years

Other furniture and equipment 5-10 years

Consider a Boeing 737-100 airplane that Alaska required for $50 million. Its useful life is 20 years, and its expected residual value is $6 million. Prepare a tabular comparison of the annual depreciation and book value for each of the first three years of service life under straight-line and DDB depreciation. Show all amounts in thousands of dollars (rounded to the nearest thousand). (Note that this is a caparison of methods for reporting to shareholders.

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