XYZ Company has purchased equipment as follows

Land for $1,500,000 on May 1st, 2012

Building of $500,000 on June 1st, 2012, useful life of 40 years

Equipment of $200,000 on August 1st, 2012, with salvage value of $20,000, useful life of 5 years

Prepare depreciation based on the Straight Line Method and then compare based on the Double-Declining Balance Method. Analyze and compare the two proposed depreciation schedules and provide your insight on the advantages and disadvantages of both.