At the beginning of 2003, Lowham’s Guest Ranch constructed a new walk-in freezer that had a useful life of 10 years. At the end of 10 years, the motor could be salvaged for $2,000. In addition to construction costs that totaled $10,000, the following costs were incurred: Salesitaxes On COMmpoOmentSmme cise nine nacre nnens $1,250 DGlIVERVACOStS Le nm cia site cons) ora eae ee 800 InstallattonzofaimOtO lee same coscde isi athe ace ee 200 Painting of both interior and exterior of freezer....... 100 1. What is the cost of the walk-in freezer to Lowham’s Guest Ranch? 2. Compute the amount of depreciation to be taken in the first year assuming Lowham’s Guest Ranch uses the

a. Double-declining-balance method.

b. Sum-of-the-years’-digits method.