Use the information for Odyssey Ltd. in BEl l -5.
In exercise
Odyssey Ltd. purchased machinery on January 1, 2014, for $60,000. The machinery is estimated to have a residual value of $6,000 after a useful life of eight years.
(a) Calculate the 2014 depreciation expense using the double- declining-balance method.
(b) Calculate the 2015 depreciation expense using the double-declining-balance method, but assuming the machinery was purchased on October 1, 2014.
(c) Discuss when it might be more appropriate to use the straight-line method of depreciation and when the declining-balance method is more appropriate.