Read the scenario below and answer questions 1-3 in a Microsoft® Word® document. For question 1, give your answer and show your work. For Questions 2 and 3 answer each question in a paragraph of at least 100 words. Use APA format and cite any sources.
Scenario: Sanders Construction Co. specializes in building replicas of historic houses. Brett Sanders, president of Sanders Construction, is considering the purchase of various items of equipment on July 1, 2014 for $300,000. The equipment would have a useful life of 5 years and no residual value. Brett is considering depreciating the equipment by the straight-line method or the double declining balance method.
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Write My Essay For MeAnswer the following questions:
Calculate the depreciation for the first year using the straight-line method and the Double declining balance method, show your work.
In a short paragraph, explain the straight-line depreciation method and the Double declining balance method.
In your opinion, which method would be better for the company to use, why? Explain your answer.
SAMPLE SOLUTION
Writing Assignment – Accounting
Straight Line Method
Initial purchase cost – $300,000
Expected useful life – 5 years
Zero salvage value
= Depreciation for the first year = $ 60,000
=
Double Declining Method
20% Straight Line Percentage
40% × Initial Cost ($300,000) = $120,000
Similarly, double depreciation $60,000 × 2 = $120,000
Straight Line vs. Double Declining The calculation of depreciation in accounting involves two primary methods, namely the straight line method and the double…
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