Megan purchased machinery on January 1, 2022, at a cost of $250,000. The estimated useful life of the machinery is 4 years, with an estimated at the end of that period of $30,000. The company is considering different depreciation methods that could be used for financial reporting purposes.
Instructions
a. Prepare separate depreciation schedules for the machinery using the straight-line method, and the declining-balance method using double the straight-line rate. (Round to the nearest dollar.)
b. Which method would result in the higher reported 2022 income? In the highest total reported income over the 4-year period?
c. Which method would result in the lower reported 2022 income? In the lowest total reported income over the 4-year period?
