Kenartha Oil recently paid $483,900 for equipment that will last five years and have a residual value of $114,000. By using the machine in its operations for five years, the company expects to earn $180,000 annually, after deducting all expenses except depreciation. Complete the schedule below assuming each of (a) straightline depreciation and (b) double-declining-balance depreciation.

Analysis Component: If Kenartha Oil wants the Year 1 balance sheet to show the highest value possible for the equipment, which depreciation method will it choose? Explain.

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5-Year Totals Year 1 Year 2 Year 3 Year 4 Year 5 Profit before depreciation. Depreciation expense. Profit ****--