Question - On January 1,2017, Taylor Inc. finished installing a new capital manufacturing project for total cost of$ 300,000. The company figures that new equipment will have a useful life of five years and a residual value of $25,000.
Prepare depreciation schedules using the Straight line and Double declining method for the period of 5 years.
Prepare depreciation journal entries for December 31, 2017 for both methods, straight line and double declining.
Essay to compare and explain the cost effects of using the Double Declining method vs. straight line method of depreciation on the company's (1) expenses, (2) net income, (3) income tax, and (4) cash flows.