Equipment costing $86,000 was purchased by Spence, Inc., at thebeginning of the current year. The company will depreciate theequipment by the declining-balance method, but it has notdetermined whether the rate will be at 150 percent or 200 percentof the straight-line rate. The estimated useful life of theequipment is eight years.
Prepare a comparison of the two alternative rates for managementfor the first two years Spence owns the equipment. (Do notround your intermediate calculations. Round your answers to thenearest dollar amount.)
Year1 Year 2
Double-Declining Balance Depriciation ___________ ____________
150% Declining-Balance Depriciation_____________ ____________
Excess of Double Declining-Balance over 150% Declining-balance _________ __________