Question

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 _________     __________