Marshall’s Dry Cleaning purchased new equipment on January 1, 2010, at a cost of $125,000. The estimated useful life is eight years with a salvage value of $15,000.
1. Prepare two different depreciation schedules for the equipment—one using the straight-line method, and the other using the double-declining balance method. (Round to the nearest dollar.)
2. Determine which method would result in the greatest net income for the year 2010.