1. Machinery is purchased on May 15, 2015 for $120,000 with a $10,000 salvage value and a five year life. The half year convention is followed. What method of depreciation will give the highest amount of depreciation expense in year 2?
Straight line
Double declining balance
150% declining balance
Amount cannot be determined
2. True/ False- Mutual funds keep a percentage of their assets in corporate bonds because some shareholders will want to redeem their shares each day? Explain answer.