Depreciation Expense/ Please help answer in detail
On July 1, Srini Construction purchased special-purpose equipment at a cost of $1,000,000. The useful life of the equipment was estimated to be 5 years, with a residual value of $50,000.
a. Compute the depreciation expense to be recognized each calendar year for financial reporting purposes under the straight-line depreciation method.
b. Compute the depreciation expense to be recognized each calendar year for financial reporting purposes under the 200 percent (double) declining-balance method.
c. Which of these two depreciation methods (straight-line or double-declining-balance) results in the highest net income for financial reporting purposes during the first two years of the equipment's use? Explain.