Response to the following problem:
Response to the following problem:
Sheren Limited purchased the following equipment on January 1, 2016.
Cost $6,000
Estimated useful life 5 years
Residual value $300
Required:
1. Calculate the total depreciation for the five-year period 2016-2020, under the straight-line and double-declining balance methods. Assume the company uses the ½ year rule to calculate depreciation expense in the year of acquisition and disposal.
2. List the advantages of
a. The straight-line method of depreciation
b. The double-declining balance method.