Question: Cutter Enterprises purchased equipment for $90,000 on January 1, 2016. The equipment is expected to have a five-year life and a residual value of $5,700.
Using the sum-of-the-years'-digits method, depreciation for 2017 and book value at December 31, 2017, would be (Do not round depreciation rate per year):
a. $24,000 and $30,300.
b. $22,480 and $33,720.
c. $24,000 and $36,000.
d. $22,480 and $39,420.